Essay What Is Stock Anyway

The certificate of deposit is a promise to pay an agreed amount but is not and order to pay. The certificate of deposit occurs when there is a deposited amount between two-parties that the institution promises to pay back with a predetermined interest rate. The certificate of deposit will have a set time frame to be paid back to the other party (Negotiable Instruments & Banks, 2013).

think of a mutual fund as a company that brings together a group of people and invests

| |A bond debenture is a legal document that details all of the conditions relating to a bond issue. |

Mutual funds represent a portion of its holdings. It’s buying into certain products sold by the company. An example is investing in beef products. Anything that occurs with the meat products can affect the amount of money earned. Should a recall happen, people that

* Bond - A type of debt or a long-term promissory note, issued by the borrower, promising to pay its holder a predetermined and fixed amount of interest each year. Bonds provide the borrower with external funds to finance long-term investments

Preferred stock has a preferred position in the claim on the income flow of the firms. Preferred stock dividends, usually a fixed rate relative to par value, are paid ahead of common stock dividends. The dividends of preferred stocks are different from and generally greater than those of common stock. Corporate bonds are debt instruments created by companies for the purpose of raising capital. They are called fixed-income securities because they pay a specified amount of interest on a regular basis. Preferred and Common stocks have three major risk factors: 1) dividend suspension or company failure, 2) rising interest rates, 3) low trading volumes. Most corporate bonds are debentures, meaning they are not secured by collateral. Investors of such bonds must assume not only interest rate risk but also credit risk; they chance that the corporate issuer will default on its debt

A debt asset in which an investor lends funds to an entity, firm or government that have a loan of funds for a defined period at a fixed interest rate. Bonds are used by firms municipalities, states, and United States and foreign government to finance a diversity of projects and activities, bonds are commonly referred to as fixed income.

What are bonds? – According to the lesson, bonds are investments that promise to pay a certain amount of interest on the principle amount after a given time period.

According to Celebrity Net Worth, bonds are financial instruments that are sold to raise money. "When you buy a bond, you are buying debt: you are basically loaning money in exchange for an interest payment and a promise that the money will be paid back."

“However, there are over 10,000 mutual funds in operation, and these funds vary greatly according to investment objective, size strategy, and style. Mutual funds are available for virtually every investment strategy (e.g. value, growth), every sector (e.g. biotech, internet), and every country and region of the world. So even the process of selecting a fund can be tedious” (Staff).

A bond is a "security" which gives the holder a financial claim on the issuer. This claim protects the holder in circumstances in which the issuer is unable to pay the amount due. It is made formal by the "trust indenture", a legal document, which specifies all of the bond's features and the legal rights and obligations of all the parties to the agreement (http://www.finpipe.com/bndchar.htm).

Mutual fund also offers good investment opportunities to the investors. Like all investment, they also carry certain risks. The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions. The Indian mutual fund industry has witnessed several structural and regulatory reforms.

Mutual funds are an easy, convenient way to invest, without having to worry about choosing individual stocks. A mutual fund can be defined as a single portfolio of stocks, bonds, and/or cash managed by an investment company on behalf of many investors. The investment company manages the fund, and sells shares in the fund to individual investors. When one invests in a mutual fund, they become a part-owner of a large investment portfolio, along with all the other shareholders of the fund. The fund manager invests the contributions when shares are purchased, along with money from the other shareholders. Every day, the fund manager counts up the value of all the fund's holdings, figures out how many shares have been purchased by

Mutual funds gather money from several investors to buy and sell stocks, bonds, and others. In addition, a mutual fund is important for the investor, who is new in investing, or too busy to do a research on many companies individually. Mutual funds allow investors to invest in many companies with a single acquisition. Therefore, acquiring a mutual fund is a great method to diversify the investments portfolio. However, the price of mutual fund will decline, if the industry that investor focuses on, is performing badly. In addition, mutual funds method is less risky than an individual stock.

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. In other words, Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds