Types of securities
On the secondary market most of the securities that are traded, fall into two broad categories: bonds and shares .
The bonds are redeemable debt securities, which give a guaranteed fixed return. Their characteristics are the nominal value, expiration date and coupon interest.
The nominal value is the amount of money paid to those who have the expiration date.
Interest, the amount of which does not change, are calculated on the value of the bond and paid with annual coupons.
They, by law, must always be paid and in the case where the issuer is not the case is exposed in a failure.
Actions can be of two types: ordinary and preference.
The preferred shares, similar to bonds with a nominal value defined and provide for payment of a dividend, similar to the coupon.
Unlike bonds have no default expiration date and dividends may remain unsolved for years without this leading to bankruptcy.
Ordinary shares do not provide quantified annual payments, or expiration date.
They can have an infinite life during which a dividend is paid only if the issuer has registered profits satisfactory.
In a ranking, because the bonds provide a guaranteed return on safe investment for the provider are less risky.
The preferred shares are placed in an intermediate position, while the riskiest appear to be ordinary shares which, to compensate for reduced security, provide the highest returns.
Issuers of securities can be either private (individuals, associations, companies) and public (state agencies of various kinds).
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