Securities The word “security” stands for any type of investment.

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Presentation transcript:

Securities The word “security” stands for any type of investment

Bonds A bond is a loan. Sometimes companies want to raise money, but not lose ownership.

Bonds Bonds allow companies to borrow money and pay it back at a fixed rate.

Bonds

Maturity Date The date the bond “matures” or is totally paid back.

Bond Interest Bonds pay interest either: 2 times/year 1 time/year

How Bonds Work Coupon: interest Face value or par value: principal amount of the loan

How Bonds Work

Bond Yield Yield: amount of interest/principal

Bond Risk Bonds are usually low risk because the interest is determined before you buy.

Bond Risk

Who Issues Bonds? Corporations Government Federal Local Municipal

Federal Government Our Federal Government is operating at a deficit; it pays its bills by issuing bonds

Federal Government

Series EE Bonds Bonds sold by the U.S. Treasury (up to 30 years) Risk: Very low Guaranteed to at least double Usually exempt from state and local taxes

Series EE Bonds

War Bonds

Bond Ratings Rating: AAA to D Indicates creditworthiness (like a credit score)

Bond Ratings

Real Estate Real Estate Investing: ownership of land and buildings Risk: High

Real Estate

Speculative Investments Investment that carries a very high level of risk.

Speculative Investments

Commodity: a raw material or agricultural product that can be bought and sold, such as copper or coffee

Options Contract that offers the buyer the right to buy a security at a certain price during a certain period of time. Risk: High

Futures A contract where you buy or sell at a predetermined price in the future. Risk: High

Futures

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