Glossary of Key Terms

• Underwriter: A financial intermediary, typically an investment bank, that helps companies issue and sell securities to investors.
• Securities: Financial instruments that represent an ownership interest in a company (stocks) or a debt obligation (bonds).
• Stocks: Shares of ownership in a corporation that entitle the holder to a portion of the company's profits and voting rights.
• Bonds: Debt securities issued by companies or governments that represent a loan with a promise to repay the principal amount with interest at a future date.
• Initial Public Offering (IPO): The first sale of a company's stock to the public, allowing it to raise capital from a wider range of investors.
• Securities and Exchange Commission (SEC): A U.S. government agency responsible for regulating the securities markets and protecting investors.
• Prospectus: A legal document that provides detailed information about a company and the securities offering to potential investors.
• Due Diligence: The process of thorough investigation and analysis conducted by underwriters and investors to assess the risks and potential returns of an investment.
• Market Capitalization: The total value of a company's outstanding shares of stock, calculated by multiplying the share price by the number of shares.
• Risk Assessment: The process of identifying and evaluating potential risks associated with an investment, such as market volatility, company performance, or regulatory changes.

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