Securities – Equity Shares, Bonds, Mutual Funds

Introduction

"Securities" is the legal term for tradable financial assets.

1. Equity Shares (Ownership)

• Nature: Share in ownership of company.
• Return: Dividends (Uncertain) + Capital Appreciation.
• Risk: High. Last to be paid in case of liquidation.
• Rights: Voting rights.

2. Bonds / Debentures (Debt)

• Nature: Loan to company/Govt.
• Return: Periodic Interest (Coupon).
• Risk: Low (usually secured).
• Rights: No voting rights. Creditor status.

3. Mutual Funds (Pooled Investment)

• Mechanism: Pool money from many investors -> Professional Manager invests in Stocks/Bonds -> Profits shared.
• NAV: Net Asset Value (Price of one unit).
• Benefit: Diversification for small investors.

Summary

• Equity: High Risk, High Return, Ownership.
• Debt: Low Risk, Fixed Return, Creditor.
• Mutual Fund: Professional Management, Diversification.

Quiz Time! 🎯

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