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Ch 9: Types of Underlying Securities

About This Chapter

Have fun while you learn with this entertaining chapter on types of underlying securities, which can boost your knowledge of preferred stock, commercial paper, debt securities, and a whole lot more. Both concise and information-packed, the lessons simplify exam prep.

Types of Underlying Securities - Chapter Summary

While going through these lessons on different types of underlying securities, you can enrich your understanding of packaged retail investments and bankers' acceptance. Our professional instructors also teach you about the advantages of preferred stock and how to calculate shareholder earnings. After reviewing the lessons, you should be ready to:

  • Explain why companies issue stock
  • Recall various types of preferred stock
  • Outline how institutions use debt securities
  • Recount variations of option contracts
  • Discuss different types of government securities
  • Provide an overview of municipal bonds
  • List disadvantages of commercial paper
  • Relate why a certificate of deposit is beneficial

Mobile-friendly and developed by experts, these lessons on types of underlying securities can help you easily grasp the concepts presented. To make sure you fully understand what you've studied, we provide a short quiz for each lesson. If you're someone that likes to review information offline, simply print the quizzes in worksheet form.

9 Lessons in Chapter 9: Types of Underlying Securities
Test your knowledge with a 30-question chapter practice test
Common Stock: Definition, Issuance & Formula

1. Common Stock: Definition, Issuance & Formula

This lesson will provide you with a basic understanding of common stock, why and how companies issue stock, the potential for return on investment when investing, and how to calculate shareholder earnings.

What is Preferred Stock? - Definition, Types & Advantages

2. What is Preferred Stock? - Definition, Types & Advantages

This lesson will define the hybrid investment security called preferred stock. The various types of preferred stocks will be explained and advantages of each will be explored.

Debt Securities: Definition & Examples

3. Debt Securities: Definition & Examples

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

Options Basics: Stocks, Payoffs & Puts & Calls

4. Options Basics: Stocks, Payoffs & Puts & Calls

Many people believe the financial markets are limited to buying and selling shares of stock. But, in addition to stock, there are other financial instruments. In this lesson, we'll learn about option contracts - one such variation of stock shares.

Government Securities: Definition, Types & Examples

5. 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.

State & Local Government Securities: Definition & Types

6. State & Local Government Securities: Definition & Types

In this lesson, we'll discuss municipal bonds, types of state and local government securities. These bonds can be grouped into one of two 'buckets,' either tax-backed (general obligation bonds) or revenue-backed (revenue bonds).

Commercial Paper: Definition, Advantages & Disadvantages

7. 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

8. 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.

Banker's Acceptance: Definition, Advantages & Disadvantages

9. 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.

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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