ECN 506 Lecture Notes - Lecture 4: New York Stock Exchange, Exchange Rate, Initial Public Offering
13 Nov 2016
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Q1 write short notes on (i) hedge funds (ii) primary markets versus secondary markets (iii) options and futures (iv) standardized exchanges versus otc markets. A hedge fund is a variant of a mutual fund that raises money from wealthy people and. Hedge fund organization is a professional management firm, and often structured as a limited partnership, limited liability company, that pools capital from a number of investors and invests in securities and other instruments. In limited partnerships, partners usually have a significant investment in the partnership. Limited partners are allowed to withdraw only annually, and some have a lock up period as long as three years. One common, but risky, tool of hedge funds is leverage, which is borrowing money to purchase assets. Hedge funds also engage in the risky practice of trading derivative securities. When the firm is issuing shares for the very first time, it is called initial public.
