10 Questions
What is a bond?
A type of loan issued by a government or company to finance economic activity
Which market has the largest daily volume in the world?
The currency market
What are High Yield (HY) and Investment Grade (IG) bonds?
Different types of bonds
What is a share?
A fraction of the capital of a company
What is a corporate action?
The distribution of dividends to shareholders
What is the money market?
A sub-part of the bond market reserved for institutions
What is the dismemberment of property?
The division of a property into two parts: the bare ownership and the usufruct
What is the family SCI?
A type of real estate investment vehicle
What is a disadvantage of joint ownership?
Increased inheritance tax and potential for conflicts
What are the advantages of dismemberment of securities portfolio and life insurance policy?
Double transmission of capital to multiple beneficiaries with tax advantages
Study Notes
- The bond market is one of the largest markets, representing hundreds of billions of euros and daily exchanges exceeding 10,000 billion euros/day.
- A bond is a loan issued by a State, a local community or a company to finance its economic activity or development.
- There are different types of bonds, including High Yield (HY) and Investment Grade (IG) bonds.
- The stock market represents far fewer transactions than the bond market and is the type of asset MPP works with the most.
- A share represents a fraction of the capital of a company and gives the shareholder rights, including receiving dividends and influencing the company's policy.
- A corporate action may be the distribution of dividends, which is a share of the profits of a private company paid to each shareholder.
- The currency market is the largest market in the world, with a daily volume of more than 6,000 billion dollars.
- The money market is a sub-part of the bond market, reserved for institutions, where banks, large companies, states and investment funds come to finance themselves or invest their cash surpluses.
- The dismemberment of property consists of dividing a property into two parts: the bare ownership and the usufruct.
- The family SCI allows people united by a bond of kinship or alliance to facilitate the holding, management and transmission of one or more real estate assets.
- Joint ownership can lead to conflicts and high inheritance tax
- Dismemberment of securities portfolio and life insurance policy can allow for double transmission of capital to multiple beneficiaries with tax advantages
- Temporary usufruct can be used to help a relative without giving up ownership and reduce IFI
- SCPI shares in bare ownership offer discounts and exemption from income tax, but no regular income and reduced liquidity
- SCPI decides on distribution of usufruct/bare ownership based on duration of detention
Test your knowledge on bonds, stocks, currency markets, corporate actions, joint ownership, dismemberment of property, and family SCI concepts related to finance and asset management.
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