What is derrivatives? What isTLC? What is hedge funds?

Question

Accepted Answer

Derivatives are financial contracts whose value is derived from an underlying asset. TLC stands for tender loving care. Hedge funds are investment funds that pool capital from accredited individuals or institutional investors.

Derivatives are financial instruments that derive their value from an underlying asset, such as stocks, bonds, commodities, or currencies.
They are used for hedging against potential price fluctuations, speculating on future price movements, or gaining exposure to certain assets without owning them directly.
Examples of derivatives include options, futures contracts, swaps, and forward contracts.
TLC, in the context of the question, is likely an abbreviation for 'tender loving care,' which refers to providing care, attention, and support.
Hedge funds are investment funds that pool capital from accredited individuals or institutional investors and use various strategies to generate high returns.
They often employ leverage, short-selling, and other complex techniques to hedge against market risks and aim for absolute returns.
Hedge funds are typically only available to wealthy investors due to regulatory requirements and high minimum investment thresholds.
Examples of well-known hedge funds include Bridgewater Associates, Renaissance Technologies, and Citadel.

Accepted Answer

Derivatives:

Derivatives are financial instruments whose value is derived from underlying financial Assets.

Trade Life Cycle:

The trade life cycle refers to the process of buying and selling financial instruments, such as stocks, bonds, and derivatives, from the initial trade initiation to the settlement of the transaction. The trade life cycle typically involves several steps, including:

1. Trade initiation:

The process of initiating trade by placing an order to buy or sell a financial instrument.

2. Trade capture:

Recording and documenting the details of a trade, including the security, quantity, price, and parties involved.

3. Trade confirmation:

Sending confirmation to both parties involved in the trade, verifying the trade details and settlement date.

4. Trade matching:

Comparing and ensuring that the trade details provided by both parties agree and match.

5. Trade settlement:

Transferring ownership of the financial instrument from the seller to the buyer and completing the payment.

6. Trade clearing:

When a clearinghouse acts as an intermediary, ensuring the correct and timely settlement of the trade.

7. Trade reconciliation:

Verifying the trade details and updating the books and records to reflect the completed transaction.

Hedge Funds:

Hedge funds are investment funds that pool capital from institutional investors and high-net-worth individuals to invest in a wide range of assets and strategies. They are typically managed by professional fund managers who aim to generate high returns by utilizing various investment techniques

What is derrivatives? What isTLC? What is hedge funds?

Top BNY Reconciliation Analyst interview questions & answers

Popular interview questions of Reconciliation Analyst

Top HR questions asked in BNY Reconciliation Analyst