Ch 17: Debt Securities

About This Chapter

In this chapter you will cover detailed information about debt securities: what they are, how they work, and examples of various types. Specifically, this chapter will also help you feel confident in your knowledge of topics including debt security yields, structured products, certificate of deposits, and more.

Debt Securities - Chapter Summary

There is a lot of information for you to review about debt securities in this chapter. You'll start with the definition, and further your knowledge with specific examples. As you continue through the lessons you will also cover the structure, risks, rewards, and call provisions of debt securities. By the time you reach the end of the chapter you will also be able to:

  • Discuss the advantages and disadvantages of commercial paper
  • Analyze the pros and cons of certificates of deposit
  • Define a Eurodollar Bond and explain its advantages and disadvantages
  • Discuss the pros and cons of variable-rate preferred debt securities
  • Explain the characteristics of structured products
  • List the types and characteristics of non-U.S. debt securities
  • Explain types of debt security yields, including examples
  • Discuss Moody's vs. Standard & Poor's bond ratings

As you proceed through each lesson, you will notice that our professional instructors have emphasized certain key terms. By focusing your attention on these terms you are likely to progress more rapidly toward a thorough understanding of this topic. You can self-monitor your comprehension with our lesson-end quizzes and by tracking your progress on your Dashboard.

10 Lessons in Chapter 17: Debt Securities
Test your knowledge with a 30-question chapter practice test
Debt Securities: Definition & Examples

1. Debt Securities: Definition & Examples

While they share similar attributes, debt securities vary by the type of institution that creates them. In this lesson, we'll review how institutions use debt securities to finance operational activities.

Commercial Paper: Definition, Advantages & Disadvantages

2. Commercial Paper: Definition, Advantages & Disadvantages

A great way for companies with high credit ratings to raise short term cash for operating purposes is through commercial paper. Most large public companies issue commercial paper.

Certificate of Deposit: Definition, Advantages & Disadvantages

3. 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.

Eurodollar Bond: Definition, Advantages & Disadvantages

4. Eurodollar Bond: Definition, Advantages & Disadvantages

In this lesson, you will be introduced to Eurodollar bonds, their characteristics, issuing entities, currency denominations, etc. The lesson will also talk about the advantages and disadvantages of Eurodollar bonds to different entities.

Variable-Rate Preferred Debt Securities: Definition, Pros & Cons

5. Variable-Rate Preferred Debt Securities: Definition, Pros & Cons

This lesson deals with variable-rate preferred debt securities. We will learn about inflation based, interest rate linked and mixed rate variable-rate preferred debt securities.

Debt Securities: Structure, Risks, Rewards & Call Provisions

6. Debt Securities: Structure, Risks, Rewards & Call Provisions

In this lesson you will learn about the common structure of debt securities, sources of risks and rewards, call provisions and their effects on security issuers and investors.

Structured Products: Definition & Characteristics

7. Structured Products: Definition & Characteristics

This lesson deals with structured products, their composition, and their characteristics. Learn about equity-linked securities and exchange-traded notes (ETNs) and their characteristics.

Non-U.S. Debt Securities: Types & Characteristics

8. Non-U.S. Debt Securities: Types & Characteristics

This lesson deals with debt securities issued or traded outside the US. Learn how to differentiate among international bonds, such as Eurobonds, foreign bonds, global bonds, and sovereign bonds.

Debt Security Yields: Types & Examples

9. Debt Security Yields: Types & Examples

This lesson deals with different types of bond yields. Learn to understand the difference between the types of yields, the relationship between them and their effect on the price of bonds.

Moody's vs. Standard & Poor's Bond Ratings

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.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
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Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
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