1. Investment Banking

2. Objectives List characteristics of an investment bank
Explain how an investment bank differs from a commercial bank
Describe the functions performed by investment banks
List methods for raising capital
Describe the evolution of investment banking
Objectives

3. Key Vocabulary Federal Securities Act of 1933 Maturity Date Merger
Financial Holding Company
Glass-Steagall Act
Gramm-Leach-Bliley Act
Investment Bank
Initial Public Offering
Maturity Date
Merger
Panic of 1907
Securities and Exchange commission
Subprime Mortgage crisis
Underwriting
Venture Capital
Key Vocabulary

4. Investment Banking Services
A few years ago you received a Play Station 3 for your birthday. You have the Dual Shock 3 controllers, almost 20 video games, and a few Blu-ray movies to go along with it. Lately you’ve wanted to upgrade by purchasing the latest and greatest video game system; however, before you can do that, you’ll need to sell your own. You’re hoping to make at least a few hundred dollars from the sale, but you’re not quite sure how much to sell the package for. What approaches could you take to learn what it’s really worth?
Investment Banking Services

5. Investment Banking Services
There are certain characteristics that can determine a system’s worth
What are those factors?
Investment banks are faced with similar challenges of determining values
One of the services that an investment bank provides is determining the worth or value of a company
Investment Banking Services

6. Investment Banking Services
Variety of ways
Analyzing data to review the worth of comparable companies
The current status of the company with regard to products and services offered
Long-range plans for the future to ensure its survival
Investment Banking Services

7. Introduction to Investment Banks and Their Services
Download: Reading- Introduction to Investment Banks and Their Services
Predict what they think one of the main functions of an investment bank will be
while they are reading they must accomplish the following tasks
Underline the characteristics of an investment bank (e.g., investment banks are financial institutions that cater to the needs of companies, organizations, and even the government)
Highlight specific services provided by investment banks (e.g., investment banks research and analyze a company’s worth)
Introduction to Investment Banks and Their Services

8. Introduction to Investment Banks and Their Services
The function of investment banking involves:
Capital raising methods
Mergers and acquisitions
Investment banks
Services are essential to maintain a growing and healthy economy
Introduction to Investment Banks and Their Services

9. Investment Bank Term Category Characteristics A commercial bank is a
Financial institution that usually
Offers a range of deposit accounts
Makes a loan to individuals and businesses
Safeguards documents, money, and other item of value
An investment bank is a 1. 2. 3.
Investment Bank

10. Group Work What is an I.P.O.? Why would a company issue an I.P.O.?
What does an investment bank have to do with an I.P.O.?
What is underwriting stock?
How does a bank get money from being a part of this I.P.O.?
What determines if an I.P.O. is successful or not?
Group Work

11. At your table look up information about a recent I. P. O. filing
At your table look up information about a recent I.P.O. filing. This will be first come first serve per company.
Determine what the company does to receive revenue
What investment bank was involved?
How many shares were issued and at what price?
What was the market value of the company then and now?
Use end of the day numbers
Market value=share price*#of shares outstanding
Was this a successful I.P.O.?
How many times can a company have an I.P.O.?
1 minute presentation

12. Commercial banks are primarily concerned with an individual’s wealth
Investment banks handle the wealth of companies, organizations, extremely wealthy individuals, and even governments
Investment Bank

13. The line between what was an investment bank and a commercial bank is blurred
Banks in general are taking a broader approach to the services they offer
Investment Bank

14. Evolution of the Investment Bank
Download- Graphic Organizer: Cause and Effect
Presentation
Evolution of the Investment Bank

15. The Influence of Investment Banking on Society
What type of economic effects (both positive and negative) has the investment industry had on the economy?
The Influence of Investment Banking on Society

16. The Influence of Investment Banking on Society
What type of social effects (both positive and negative) has the investment industry had on society?
The Influence of Investment Banking on Society

17. Investment Banking Characteristics of an investment bank
Services of an investment bank
Capital raising methods
Underwriting
Bulge bracket to boutique
Investment Banking

18. You will have the next 15 minutes to create one or two short-answer questions based on the list of key ideas provided
Investment Banking

19. Overview of Investment Banking
Quiz: Overview of Investment Banking
Overview of Investment Banking

20. Culminating Project Work: Investment Banking
Think about your project topic and of the different ways they will be communicating information about the topic to the audience at the financial literacy fair
display board
brochure,
talking about the topic with visitors to their booth
Culminating Project Work: Investment Banking

21. Culminating Project Work: Investment Banking
What have you learned in this lesson that can help you improve your culminating project products?
Identify and describe three ways in which the information you’ve learned in this lesson could improve your culminating project products.
List the places you’d like to make the edits. That is, identify which product or products should include the new information
Culminating Project Work: Investment Banking

22. Based upon your learning from the lesson, respond to the prompt written below.
Work in groups of four to share their predictions with one another.
Choose one prediction that they think is the most reasonable to share with the rest of the class.
In the next 10–20 years, the investment banking industry will be characterized by…
Enrichment

23. With the current turmoil surrounding the financial services industry, synthesize your knowledge of investment banks and create classic “wanted-style” posters based on the types of ethical standards that you would like investment banks to adopt.
Use a standard 8.5 x 11 paper and write “WANTED INVESTMENT BANK” at the top
Underneath the heading, create three ethical standards and/or regulations that you would like investment banks to abide by
Enrichment

24. Read the article “Wall street investment banks have a way of snookering commercial rivals” (
Investigate various examples of commercial banks acquiring investment banks.
Enrichment

25. Watch the short video clip found at http://www. labnol
Research how investment banks have contributed to the financial crisis of today and share your findings with the class
Enrichment

26. Have students write a personal essay in response to the following quote (found online at
“The Glass-Steagall Act separated commercial and investment banking. This last statute has recently been repealed. Sooner or later, we will likely painfully relearn the reasons for its passage almost seven decades ago.”
Enrichment

27. Research various investments banks and other financial institutions that offer investment banking services. Have students choose an institution to write about and prepare a short essay that describes the history, the services provided, the main products offered, and the current financial situation.
Enrichment

28. Cross-Curricular Integration
Information Technology: Every year global leaders attend the World Economic Forum in Switzerland. During the 2009 meeting, the Davos Debates were launched and included responses from individuals around the world. In light of some of the major events that have shaped the investment banking industry, have students create their own podcasts or videos that respond to the 2009 Davos Debate question: “Should company executives have a code of ethics similar to doctors and lawyers?”
Cross-Curricular Integration