About This Chapter
Debt Instruments - Chapter Summary
Learn about or get reacquainted with how to select a debt instrument, describe how to invest in special types of bonds and exaplain options for selling bonds with help from this chapter's fun lessons. Our instructors closely examine debt instruments by going over money market funds, commercial papers and more. After finishing this chapter, you will be ready to:
- List types of government securities
- Differentiate between corporate and municipal bonds
- Share examples of convertible bonds in accounting
- Discuss advantages and disadvantages of a certificate of deposit and banker's acceptance
- Calculate the coupon rate
- Compare Moody's and Standard & Poor's bond ratings
Explore this chapter your way by selecting lessons to review based on your existing understanding of debt instruments. Our multiple-choice quizzes can gauge your knowledge and help you determine which lessons need more attention. If you need help grasping details presented in this chapter, be sure to send questions to our subject-matter experts via the Dashboard. Have a busy schedule and worry about a lack of study time? Around-the-clock mobile access makes it easy to fit your review of this chapter into your schedule.
1. How to Select a Debt Instrument
In this lesson, we will cover the selection of debt instruments used to finance corporate initiatives. Various types of instruments will be discussed, as well taxation as issues with each instrument.
2. Government Securities: Definition, Types & Examples
Governments need money to operate and, just like people and businesses, they will borrow money when needed. In this lesson, you'll learn about government securities.
3. What are Corporate Bonds? - Definition & Examples
In this lesson, we'll explore corporate bonds and how they relate to an investor's risk tolerance. You'll also learn about the advantages and disadvantages of corporate bonds.
4. What Are Municipal Bonds? - Definition, Types & Examples
This lesson will define municipal bonds, a type of debt vehicle issued by state and local governments. The two types of municipal bonds will be explored, and examples will be given.
5. Convertible Bonds in Accounting: Definition & Examples
Convertible bonds are a special type of bond that gives the owner the option to trade for a certain amount of stock in the company. This lesson provides a detailed definition as well as examples to reinforce learning.
6. What Are Money Market Funds? - Definition, Types & Examples
Do you want to earn a higher rate of return on your investment but want to do it in a safe and less risky way? Read on to find out more about money market funds and how they can help you earn a higher rate of return in a low risk way.
7. Certificate of Deposit: Definition, Advantages & Disadvantages
One of the advantages of being financially wise and having a savings account or funds to invest is that you can make your money work for you by earning interest. In this lesson we'll learn about one investment - a certificate of deposit.
8. Banker's Acceptance: Definition, Advantages & Disadvantages
To minimize risk, the vendor may request a banker's acceptance from a new business to cover the cost of products. This is like a post-dated check that is debited from the company's account on a specific date.
9. Coupon Rate: Definition, Formula & Calculation
This lesson will define coupon rate, a term used in fixed-income investing. The formula for coupon rate will be given, along with a calculation using the coupon rate.
10. Moody's vs. Standard & Poor's Bond Ratings
Moody's and Standard & Poor's are bond rating organizations that evaluate the credit worthiness of individual corporate and government bonds. This lesson will familiarize you with the basics of their bond rating systems.
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Other chapters within the SIE Exam Study Guide course
- Federal Laws & Regulations in the Securities Industry
- Regulatory Entities & Agencies
- Market Participants & Structure
- Federal Reserve & Market Impacts
- Economic Factors
- Equity Securities
- Options in the Financial Industry
- Investment Companies & Packaged Products
- Municipal Fund Securities
- DPPs, REITs & Hedge Funds
- Exchange-Traded Products (ETPs)
- Overview of Investment Risks
- Trading Orders & Strategies
- Investment Returns & Trade Settlement
- Corporate Actions
- Customer Account Types & Registrations
- Anti-Money Laundering (AML)
- Books, Records & Privacy in Finance
- Public Communications & Suitability Requirements
- Prohibited Activities in the Financial Industry
- Regulatory Framework in the Security Industry