Overview of Investment Alternative

Overview of Investment Alternative


1) Equity Security:
1. A. Common Stock: It represents ownership interest in issuing corporation.
a. Class A: Non voting common stock entitled to receive dividend.
b. Class B: Voting common stock not entitled to receive dividend.

1. B. Preferred Stock: Usually non voting but has priority over common stock in dividend and liquidation right.

2) Short Term Debt Securities: Obligations that matures in one year or less than one year.
2. A Negotiable CDs: Issue by federally insured commercial banks with minimum face value of Rs. 100,000.

2. B. Commercial Paper: Promissory negotiable notes issued by larger well known corporations.

2. C. Banker's Acceptance: Used by importers. The accepting bank guarantees payment by borrowers.

2. D. T-Bills

3) Intermediate and Long term Debt: Obligate that matures more then one year.
3. A. U. S. government Securities:
3. A.I. Treasury Notes: Maturity 1-10 years. Sold at face value with specified interest payment
3. A.II. Treasury Bonds: Maturity over 10 years.

3. A.III. Saving Bonds: Non negotiable saving instrument issued by government.

3. B. Municipal Securities:

3B.I Revenue Bonds: Issued to obtain financing for specific project such as hydropower, hospital. Revenue from these projects are earmarked to meet interest and principal payments.

3.B II. General Obligation Bonds: The general revenues (tax) of the issuer provides fund to meet interest and principal payments.

3. C Corporate Bonds

4. Hybrid Securities: Securities that have characteristic of both equity and debts.

4. A. Convertible preferred Stock: Convert preferred stock to common stock.

4. B Convertible Bonds: Convert bonds to common stock.

5 Derivative Securities: Securities whose value derives from the value of underlying securities.

5. A. Option: Provide the right to buy or sell shares of common stock of a specific corporation within a limited period of time at a designated price (Exercise price)

5. B Commodity Futures: Provides the contract holders the right to sell a specified amount of an agriculture or natural resources commodity a designated price with in a specified period to time.

5.C. Financial Futures: Provides the contract holders the right to sell a specified amount of common stock index; bonds or FCY at a designated price within a specified period of time.

5. D. Option on Futures: Provides the right to buy or sell a specified commodity or financial futures within a limited period of time at a designated price.

5. E Rights: Rights share.

5.F Warrants: Issued by corporations provide holder the right or option to purchase additional bonds or shares of common stock from the issuing corporation at a specified price within designated period of time.
6) Real Assets:

6. A. Precious Metals: includes gold, silver, platinum and other metals.

6. B. Real Estate: Single and multi family residence undeveloped Land, commercial property and farm land.

6.C: Collections: Diamonds, prints, fine arts, stamps.

7) International Investments: Investment by individuals in debt or equity securities issued by organization outside the country of residence of the investor.

7. A. Multinational Corporation

7. B. Foreign Stock Traded on a Local Exchange.

8) Other Investment Alternatives:

8. A. Pension Funds:
8. B. Mutual Funds