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Capital Markets and Investment Banking Process Paper

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Analyze the investment banking process, and address the following:

Describe the investment banking process for an IPO.

Describe factors that must be considered when selecting among asset classes for an investment portfolio.

Describe capital market instruments used in portfolio construction.

Make general recommendations for the composition of an investment portfolio. Include rationale for your recommendations.

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Capital Markets and Investment Banking Process:

An investment banking process is considered to be a vital element within the industry of development and commerce for a long period of time while many people still consider it the process to be a mystery especially the individuals who are found outside the investment banking houses and the largest corporations and are involved in the investment banking transactions.

Actual funds investments and capital generation are considered to be the various vital stages available in the process. Small private companies are known to issue IPO's which involves a series of steps to be carried out. For a company to go public, it first ensures that an investment bank is hired to carry out the process of underwriting. The underwriters employed have the obligation of interceding between the investors, the public and the available companies.

The process involves six major steps which have to be carried out. The first step in the deal negotiation process between an investment bank and the company. This will require a discussion of the money to be raised, the type of security to be used, and any other details involved during the process of underwriting. The second step requires the act of statement registration which is further made available to the securities exchange commission. This involves information on offering and other information about a company for instance, the financial information.

The third step requires the provision of a cooling period whereby an initial prospectus is published during this time with the relevant information about the company. The fourth step requires the meeting of an underwriter and a company with an aim of determination of the stock price. The current market position determines the decision of the price to be determined. The final step requires that stock be taken to the market for selling so that money could be raised for investors ...

Solution Summary

The solution discusses capital markets and investment banking process.