This document discusses various types of financial instruments including bonds, stocks, and money market instruments. It provides details on bonds issued by governments, municipalities, and corporations. It also describes mortgage-backed securities, preferred stocks, and convertible securities. Quality ratings for bonds are discussed, with AAA being the highest rating and C being the lowest. The two main factors that determine a bond's price are its level of risk and interest rate.

3. Financial
Institutions
55UsersSavers
Financial
markets

5. MONEY MARKET
INSTRUMENTS

6. BONDS
A DEBT INVESTMENT IN WHICH
AN INVESTOR LOANS MONEY TO AN
ENTITY (CORPORATE OR
GOVERNMENTAL) THAT BORROWS
THE FUNDS FOR A DEFINED PERIOD
OF TIME AT A FIXED INTEREST RATE

7. MUNICIPAL
BONDS
Bonds
issued by
state or
It has two
types;
Revenue
bond(Issues
whose
proceeds will
be used to
pay for a
project that
will produce
revenue)
GENERAL
OBLIGATION
BOND (BOND
WHOSE
PROCEEDS
ARE TO BE
USED TO PAY
FOR A
PROJECT
THAT WILL
NOT
PRODUCE ANY
REVENUE)

8. .

9. MORTGAGE PASS
THROUGH SECURITY
These securities are
backed by pool of
mortgage loans
purchased from
lenders such as
saving banks.

10. ISSUER TYPES OF
SECURITY
RISK SPECIAL
FEATURES
U.S TREASURY (GOVERNMENT BONDS) MATURE IN 10 YEARS OR FEWER
FROM DATE OF ISSUE
TREASURY BONDS AND NOTES
CARRY VIRTUALLY NO RISK
STATE AND LOCAL GOVERNMENTS
(MUNICIPAL BONDS)
GENERAL OBLIGAGTION
:ISSSUED BY STATE OR LOCAL
GOVERNMENT UNITS WITH
TAXING AUTHORITY :BACKED BY
THE FULL FAITH AND CREDIT OF
THE STATE WHERE ISSUED
REVENUE :ISSUED TO PAY FOR
PROJECT S THAT GENERATE
REVENUE ,SUCH AS WATER
SYSTEMS OR TOLL
ROADS;REVENUE FROM
PROJECT USED TO PAY
PRINCIPAL AND INTEREST.
RISK VARIES ,DEPENDING ON
THE FINANCIAL HEALTH OF
ISSUER
MOST LARGE MUNICIPAL BOND
ISSUES ARE RELATED IN TERMS
OF CREDIT RISK(AAA OR AAA IS
THE HIGHEST RATING)
INTEREST IS EXEMPT FROM
STATE INCOME TAXES
CORPORATIONS SECURED BONDS :BONDS ARE
BACKED BY SPECIFIC ASSET S
UNSECURED BONDS
(DEBENTURES):BACKED BY THE
FINANCIAL HEALTH AND
REPUTATION OF THE ISSUER
RISK VARIES DEPENDING ON THE
FINANCIAL HEALTH OF THE
ISSUER
MOST CORPORATE BOND ISSUES
ARE RELATED IN TERMS OF
CREDIT RISK (AAA OR AAA IS
THE HIGHEST RATING)
INTEREST IS EXEMPT FROM
FEDERAL INCOME TAXES AND
MAY BE EXEMPT FROM STATE
INCOME TAXES
A FEW COOPERATE BONDS ARE
CONVERTIBLE INTO SHARES OF
COMMON STOCK OF THE
ISSUING COMPANY
FINANCIAL INSTITUTIONS MORTAGE PASS THROUGH
SECURITIES
GENERALLY VERY LOW RISK THEY PAY MONTHLY INCOME
CONSISTING OF BOTH INTEREST
AND PRINCIPAL.

11. QUALITY RATING FOR BOND
One tool bond
investor use to
asses the bond is
its bond rating
Two factors
determines the
price of bond
Its risk and its
interest rate

12. HIGHEST AAA INVESTMENT GRADE
AA
A
BBB
BB SPECULATIVE GRADE
B
CCC
CC
LOWEST C

13. STOCK

14. PREFERRED
STOCK
whose
holders
receive
preferenc
e in the
payment
of
dividend
CONVERTIBLE
SECURITIES
An investment
that can be
changed into
another form.
The most
common
convertible
securities are
convertible
bonds or
convertible
preferred
stock, which
can be
changed into
equity or
common stock