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Debt Securities and Equity Securities – Peter Dillon

Debt Securities and Equity Securities

Last Updated on January 21, 2023


  • Stocks are also referred to as equities.
  • Equity securities (e.g., common stocks)
  • Fixed income investments, including debt securities like bonds, notes, and money market instruments (some fixed income investments, such as certificates of deposit, may not be securities at all)

Equity Securities – Ownership

Equity securities are financial assets that represent shares of ownership.

Debt Securities – Loan to Issuer of Bond

  • Most common type of debt securities are bonds.
  • When you purchase a bond from an issuer, you’re essentially lending the issuer money
  • Debt securities carry risk – price risk and credit risk

Securities Recap

  • Equity securities are financial assets that represent shares of a corporation.
  • Debt securities are financial assets that define the terms of a loan between an issuer (borrower) and an investor (lender).
  • Fixed income investments are interest income-oriented investments, including debt securities and certificates of deposit.