Institutional investors Flashcards
(8 cards)
What are institutional investors?
Large entities that professionally manage money, such as pension funds, mutual funds, insurance companies, hedge funds, and endowments.
What is the main role of institutional investors in financial markets?
Allocating large amounts of capital into various asset classes to support economic growth and liquidity.
How do institutional investors manage investments?
through professional analysts, quantitative models, and diversified strategies for efficient decision-making and risk control.
How do institutional investors contribute to price discovery?
Their large-scale trading and research help set fair prices and improve market efficiency.
What impact do institutional investors have on market liquidity?
They provide steady trading volume, making it easier for others to buy or sell, and often reduce market volatility.
What role do institutional investors play in corporate governance?
They vote on company matters, influence management decisions, and demand transparency and accountability.
How is the investment horizon of institutional investors different from retail investors?
Institutions often invest with a long-term perspective, focusing on sustainability and value creation.
Why are institutional investors important to financial markets?
They enhance market depth, professionalism, and stability through their large-scale, informed participation.
