what is private equity , difference between private equity and hedge funds

Question

Accepted Answer

Private equity is investing in private companies with the aim of generating high returns. Hedge funds are pools of capital from accredited individuals.

Private equity firms invest in private companies and aim to generate high returns by improving the company's operations and financials.
Hedge funds are pools of capital from accredited individuals and invest in a variety of assets, including stocks, bonds, and derivatives.
Private equity investments are illiquid and have a longer investment horizon, while hedge funds are more liquid and have a shorter investment horizon.
Private equity firms typically take a controlling stake in the companies they invest in, while hedge funds do not.
Examples of private equity firms include Blackstone and KKR, while examples of hedge funds include Bridgewater Associates and Renaissance Technologies.

Accepted Answer

Derivatives - derivative is a contract whose value which comes from its underlying asset.
There are four types of derivative
1. Option - option is a contract agreement between buyer and seller that give the purchaser the right to buy and sell particular asset later at an agree upon price
2.swap - swaps are  agreement between two parties to exchange cash based on notional amount 
3. future-  future is a legal agreement between two parties to buy or Sell particular commodity at predetermined price in the future.
4 Forward - forward it is private agreement between two parties to buy or sell particular asset at predetermined price in the future.
 forward

what is private equity , difference between private equity and hedge funds

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