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Invested banking: An investment bank is a financial institution that assists individual corporation and government in raising capital by underwriting or acting as clients agent in the issuance of securities. Merchant bank: A merchant bank is a financial institution, which provides capital to company in the form of share ownership instead of loans. Right issue: The rights issue involves selling of securities to the existing shareholders in proportion to their current holding. Prospectus: A formal written document that advertises or describe about a new offer or forthcoming financial security in order to attract or inform to its potential buyers. Best efforts: An agreement in which an underwriter promises to make a full-fledged attempt to sell as much as of an IPO as possible to the public rather than buying it own. Hostile takeover: The acquisition of one company (called the target company) by another (called the acquirer) that is accomplished not by coming to an agreement with the target companys management, but by going directly to th companys shareholders or fighting to replace management in order to get the acquisition approved. Market order: An order that an investor makes through a broker to buy or sell a security at the best available price. Limit order: An order by which an investor specify the most he is willing to pay (buy) or the least he is willing to accept (sell) for a security. Market maker: A company, broker or individual conduct both buying and selling securities at a specified price. Financial holding company: A financial institution engaged in nonbanking activities that offers customers a wide range of financial services, including the opportunity to purchase insurance product and invest in securities. Buyback: The repurchase of outstanding shares by a company in order to reduce the number of shares in the market. Delisting: Removal of a stock from the exchange it was traded on caused usually by a serious violation of the exchange rule or inability to meet financial commitment when they fall due. Syndicated loan: Large loan arranged jointly by two or more financial institutions to share the risk involved. Spin off: An independent company created from an existing part of another company through a divesture, such as a sale or distribution of new shares. Hive off: Separating a large company into a small subsidiary business. Structure finance: A service that generally involves highly complex financial transaction offered by many large financial institutions for companies with unique financial needs. Collateralized bond obligation (CBO): Investment grade bonds backed by a collection of junk bonds with different levels of risk. Collateralized loan obligation (CLO): A security backed by a pool of commercial or personal loans, structure so that there are several classes of bondholders with varying maturities called tranches.
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