Financial securities Research Paper Example | Topics and Well Written Essays - 500 words

Financial securities - Research base ExampleGiven 100,000 dollars, it is important to make a ending on the right investment decision so as to make the maximum possible profits from the investment. One can choose from a number of securities which ar classified into m adepty market securities, capital market securities or derivative securities (Atack and Larry, Pg. 76). bills market securities are those securities that facilitate the sale of short terminal debt securities. They have a maturity of one year or less.Capital securities on the opposite hand facilitate the sale of long term securities such as bonds, mortgages, stocks and mortgage backed securities. Bonds are takingss by the treasury or by the presidential term agencies (Madura, Pg. 163). They can also be issued by corporations which want to raise funds to expand their operations. Mortgages on the other hand are obligations that are created with the aim of purchasing real estate, while mortgage backed securities are t hose debt obligations that represent claims on a package of mortgages. Finally, stocks are documents that warrant partial ownership in corporations that issue them (Bhole, Pg. 46). The returns of these securities are influenced by the interest rates prevailing in the economy at particular times. The surgery of the various corporations will also influence the returns of these securities (Madura, Pg. 249). When the performance of the corporation is high, the rate of returns will also be high and it will be worth investing in them.Derivative securities are financial contracts whose determine are derived from the values of the underlying assets. They could be for the purpose of speculation or risk management and hedging. An investor is qualified to speculate on the movement of prices of assets without necessarily buying the assets (Madura, Pg. 341). These securities also help in adjusting the risk of their subsisting investments in securities.With the 100,000 dollars, one should inv est in securities with the least