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Liabilities: A company’s legal debt or obligation that arises during the course of business operations.Ĭurrency describes the money or official means of payment in a country or region.Leveraged trades: Trading financial assets, such as equities and foreign exchange, using borrowed funds.Illiquid assets: An asset, or security, that cannot easily be sold or exchanged for cash without a substantial loss in value.The limited partners contribute the money and the general partner manages it according to the fund’s strategy. Hedge funds: An investment partnership that marries a fund manager, which can often be known as the general partner, and the investors in the hedge fund, sometimes known as the limited partners.

Financial assets: An intangible asset whose value is derived from a contractual claim, such as bank deposits, bonds, and stocks.Equities: Ownership or proprietary rights and interests in a company – synonymous with common stock.The rationale behind this technique contends that a portfolio of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio. Diversification: A risk management technique that mixes a wide variety of investments within a portfolio.Currency risk: A form of risk that arises from the change in price of one currency against another.Correlation: A statistical measure of how two securities, such as equities, bonds, commodities, move in relation to each other.Carry trade: The cost of financing positions the rate of interest earned from the securities held less the cost of funds borrowed to purchase them.

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Bonds are interest bearing and promise to pay the holder a specified sum of money at its maturity plus interest at given intervals.

Bonds: An instrument of debt issued by a corporation or government to raise capital.

Bank for International Settlements: Headquartered in Basel, Switzerland, it serves as a bank for central banks to foster international monetary and financial cooperation.

Asset managers: Financial services companies that invest on behalf of its clients.

The three main asset classes are equities (stocks), fixed-income (bonds) and cash equivalents (money market instruments).

Asset class: A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations.