(a) What in an Investment Bank?
The function of an investment bank is to give financial assistance to organizations for the purpose of raising funds through issuing and trading securities such as equities and bonds. Apart from that, an investment bank also manages corporate mergers and acquisitions. Examples of large investment banks are J.P Morgan, Goldman Sachs and Morgan Stanley.
(b) What can I do in an Investment Bank?
i. Mergers and Acquisitions - Basically, you will use your expertise to advice clients regarding corporate takeovers i.e. when an organization mergers with another organization. You will review the structure of deals on behalf of your client and negotiate conditions so that it is a win-win situation for both parties.
ii. Trading - As a trader, your role is to raise funds for individuals or organizations through trading securities such as equities, bonds, foreign exchange (Forex), options and futures etc. You will need to convince your clients regarding the profitability of your stock. To become a successful trader, you have to be able to identify trends in the market as well as a sound knowledge of financial instruments.
iii. Stock Broking - Your role is to sell bonds, stocks, insurance, securities and other investments on behalf of your clients. There are three types of stock brokers. The first is ‘execution-only’, which means that the broker will buy or sell based strictly on the client’s specific instructions. The second is advisory dealing, whereby the broker will advise the client on the best transaction but the final decision is made by the client. The third is discretionary dealing, whereby the broker makes all the decisions on transactions based on the client’s objectives.
iv. IT and Systems Consultant - Then again, you can integrate your knowledge on computer software and programmes into your profession. By becoming an IT and Systems consultant, you can assist an organization in setting up its trading software or pricing software based on their specific demands.
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