The document organizes various methods for investing financial assets into direct investing, indirect investing, and different asset classes. Direct investing involves individuals purchasing securities directly, while indirect investing involves purchasing shares of investment companies that hold portfolios of securities. The document further breaks down the different asset classes an investor may choose from, including money market securities, fixed income securities, equity securities, and derivative securities.

1. Organizing Financial Assets
 Direct Investing
 Investors buy and sell securities
themselves, typically through brokerage
accounts.
 Indirect Investing
 The buying and selling of the shares of
investment companies, which in turn hold
portfolios of securities.

2. Direct Investing
 Non marketable Financial Assets
 Savings deposits
 Certificates of deposits
 Money market deposit account
 Money Market
 Treasury bills
 Commercial Papers
 Euro Dollars
 Banker’s acceptances

3. Direct Investing
 Capital Market
 Fixed income
 Equities
 Derivatives market
 Options
 Futures contracts

4. Indirect Investing
 Investment companies
 Unit Investment trust (NIT)
 Mutual Funds
 Open end mutual funds
 Closed end mutual funds

5. Money Market Securities
 Treasury Bill
 Discount Yield =
 Face value – pur price * 360
Face value maturity of bill in days
 Investment yield =
 Face value – pur price * 365
Pur. Price maturity of bill in days

6. Fixed Income Securites
 Capital Market
 Fixed income securities
 Bonds
 Call provision
 Zero coupon bond

7. Fixed Income Securites
 Types of Bonds
 Treasury Bonds
 Municipal Bonds
 Corporates
 Senior Securities
 Debenture
 Convertible Bonds
 Junk Bonds

8. Equity Securities
 Preferred Stock
 Common Stock
 Characteristics of Common Stocks
 Book Value
 Dividends
 Dividend Yield
 Payout Ratio
 Stock Dividend
 Stock Split

9. Equity Securities
 P/E Ratio
 Also called Earning Multiplier
 Can be 10 or 15 times
 Shows the investor confidence on a
particular stock

10. Derivative Securities
 Securities that derive their value in
whole or in part by having a claim on
some underlying security.
 Warrant
 A corporate created option to purchase a
stated number of common shares at a
specified price within a specified time.

11. Derivative Securities
 Options
 Put Option
 Call Option
 LEAPS
 Futures Contracts