What is a certificate of deposit (CD)?
A bank or financial institution would offer certificate of deposits (CD’s) to investors or customers. Basically, the investor or customer would agree to give the bank a lump sum of cash in exchange for a guaranteed interest rate for a set period of time.
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What are examples of debt securities?
A debt security is any security that is representing a creditor relationship with an outside entity. Examples of debt securities include corporate bonds, redeemable preferred stock, commercial paper, convertible debt, and government securities.
What is a corporate bond?
A corporate bond is a type of debt security that is issued by a corporation in order to obtain additional financing. The corporation may issue the bond to raise additional funds for ongoing operations, to merge with or acquire another company, or to expand its business (new products, geography, etc.). Corporate bonds typically pay interest, […]