SECURITIES

EQUITY SHARES
Also known as ordinary shares.

Represent the ownership position in a company.

The holder of ordinary shares becomes the owner of the company to the extent he holds the proportion of shares.

The shareholders are entitled for dividend, which is not a legal boundation on the part of the company.
Rate of dividend is not fixed and that is why ordinary share is also known as variable income security. The liability of shareholders is limited and they are residual claimants.

EQUITY SHARES- Features

Residual claim on income and assets.
Voting rights. Right to control. Limited Liability. Variable income security.

EQUITY SHARES- Types

Growth Shares
Speculative Shares Income Shares Defensive Shares Cyclic Shares

EQUITY SHARES- Merits

High Returns High Liquidity

EQUITY SHARES- Demerits

High Risk No Tax Benefits

DEBENTURES
Debenture is a long term promisory note issued for raising debt capital. Debenture holders are creditors of the company. They are primary claimants. Debenture holders are entitled for interest, which is a legal boundation on the part of the company. The rate of interest is fixed and that is why a debenture is known as a fixed income security.

DEBENTURES- Features

Fixed income security. Definite maturity.

Debenture holders are primary claimants.

DEBENTURES- Types
Convertible - Fully Convertible

- Partly Convertible
Non-Convertible

DEBENTURES- Merits

Stable & Regular Income Less Risk

DEBENTURES- Demerits
Less Returns Less liquidity

MUTUAL FUNDS
A mutual fund is a professionally managed firm of collective investments that collects money from many investors and puts it in stocks, bonds, short-term money market instruments, and/or other securities.
Mutual fund means a fund established in the form of a trust to raise money through the sale of units to the public under one or more schemes for investing in securities , including money market instruments .

MUTUAL FUNDS- Contd.

In general, 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 invested by the fund manager in different types of securities depending upon the objective of the scheme. These could range from shares to debentures to money market instruments. The income earned through these investments and the capital appreciation realized by the scheme are shared by its

unit holders in proportion to the number of units owned by them

(pro rata).

MUTUAL FUNDS- Types

Mutual Fund schemes can be classified on two basis: On the basis of Structure
On the basis of Investment Objective

On the Basis of Structure

Open-ended Funds Closed-ended Funds

On the Basis of Investment Objective

Growth Funds Income Funds Balanced Funds

Money Market Funds

Others - Tax Saving Schemes (ELSS) - Sectoral Funds - Index Funds etc.

DERIVATIVES
Futures
- Stock
- Index

Options - Stock (Call & Put)

- Index (Call &Put)