Types of Investment Options

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7 Terms

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Equity

Stock investment represent equity ownership in a publicly traded company. Company issues stock as part of capital raising to fund companies operation.

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Equity

Stocks may also offer dividends adding an income payout component to the investment.

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Fixed Income Instruments

Bonds pay investors interest in the form of coupon payments and offer full principal payments at maturity.

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Fixed income instruments

It is a well known debt instrument offered by government or corporations to raise funds.

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Preferred shares

These are shares of a company’s stock with dividends that are paid out to shareholders before common stock dividends are issued. If the company enters bankruptcy, the shareholder with preferred stock share entitled to paid from the company assets first.

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Mutual Funds

These are the pooling of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

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Derivatives

Investment products that are offered based on the movement of a specified underlying asset. The derivative itself is a contract between two or more parties, and the derivative derives its price from fluctuations in the underlying asset.