Types of Securities

What is a bond?

• A bond is a type of stock that represents ownership in a company.

• A bond is a type of insurance policy that protects against financial losses.

• A bond is a type of currency used in international trade.

• A bond is a fixed income instrument that represents a loan made by an investor to a borrower.

What is the purpose of a bond?

• To reduce inflation

• To increase government spending

• To lower interest rates

• To raise capital

If you buy a company's stock ...

• you have lent money to the company

• you are liable for the company's debts

• the company will return your investment plus interest

• the company may return you dividend

What is a government bond?

• A government bond is a type of debt security issued by a government.

• A government bond is a type of insurance policy issued by a government.

• A government bond is a type of currency issued by a government.

• A government bond is a type of equity security issued by a government.

What is a corporate bond?

• A corporate bond is a debt security issued by a corporation to raise capital.

• A corporate bond is a type of loan given by a corporation to its employees.

• A corporate bond is a type of insurance policy issued by a corporation.

• A corporate bond is a type of stock issued by a corporation.

What is a convertible bond?

• A convertible bond is a type of bond that can be converted into shares of the issuing company's preferred stock.

• A convertible bond is a type of bond that can be converted into a fixed interest rate loan.

• A convertible bond is a type of bond that can be converted into shares of the issuing company's common stock.

• A convertible bond is a type of bond that can be converted into cash at maturity.

Reorder the following:

Groups:

(a) Debt securities

,

(b) Equity securities

,

(c) Derivative Securities

,

(d) Hybrid Securities

• Common stock

• Preffered stock

• Options

• Future

• convertible bond

• Forward

• Corporation Bond

• Swap