cza - Cash A cash bank deposit is the simplest most easily understandable investment asset\u2014and the safest Not only does it give investors precise

cza - Cash A cash bank deposit is the simplest most easily...

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Cash A cash bank deposit is the simplest, most easily understandable investment asset and the safest. Not only does it give investors precise knowledge of the interest they'll earn, but it also guarantees they'll get their capital back. On the downside, the interest earned from cash socked away in a savings account seldom beats inflation. Certificates of Deposit (CDs) are highly liquid instruments, very similar to cash that are instruments that typically provide higher interest rates than those in savings accounts. However, money is locked up for a period of time and there are potential early withdrawal penalties involved. Bonds A bond is a debt instrument representing a loan made by an investor to a borrower. A typical bond will involve either a corporation or a government agency, where the borrower will issue a fixed interest rate to the lender in exchange for using their capital. Bonds are
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Unformatted text preview: commonplace in organizations that use them in order to finance operations, purchases, or other projects. Bond rates are essentially determined by the interest rates. Due to this, they are heavily traded during periods of quantitative easing or when the Federal Reserve — or other central banks — raise interest rates. Stocks Shares of stock let investors participate in the company’s success via increases in the stock’s price and through dividends . Shareholders have a claim on the company’s assets in the event of liquidation (that is, the company going bankrupt) but do not own the assets. Holders of common stock enjoy voting rights at shareholders’ meetings. Holders of preferred stock don’t have voting rights but do receive preference over common shareholders in terms of the dividend payments....
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