Collateralized Mortgage Obligations (CMOs): A Beginner’s Guide
What is a Collateralized Mortgage Obligation? A Collateralized Mortgage Obligation (CMO) is a structured fixed income product that repackages mortgage-backed securities (MBS) into multiple tranches. Each tranche offers a different level of risk, return, and maturity, allowing investors to better manage cash flows and prepayment risk. Since their creation in 1983, CMOs have become an...
Counterparty Credit Risk Explained: Definition, Examples, and Management Strategies
What is Counterparty Credit Risk? Counterparty credit risk (CCR) is a major concern in financial markets, affecting transactions in trading, derivatives, and securities. It represents the likelihood that the other party in a financial transaction will default or fail to fulfill financial obligations before the contract is settled. If one party defaults, the other may face significant financial...
Capital IQ vs. FactSet vs. Refinitiv
In the fast-paced world of global financial markets, access to accurate and timely financial data (also called big data) can make the difference between a good and exceptional investment decision. Capital IQ (CapIQ), Refinitiv, and FactSet have emerged as some of the world’s largest providers of financial intelligence, enabling investment bankers, portfolio managers, and financial...
Private Equity Career Profile
What is Private Equity? Private equity (PE) refers to the type of investment capital raised for companies that are not publicly traded. Unlike publicly traded companies, which are subject to the scrutiny of the stock market, private companies have more flexibility regarding their operations and decision-making. Private equity firms operate by acquiring these privately held...
Pink Sheets: The OTC Market
What is the Pink Sheet? Pink Sheets are a type of over-the-counter (OTC) trading service where companies’ stocks are quoted, often with less stringent regulatory requirements than a major exchange like the New York Stock Exchange (NYSE) or NASDAQ. This makes the Pink Sheets a common platform for trading penny stocks. Penny stocks are common...
