Last Updated on January 21, 2023
Securities
- 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.