Fixed Income Securities
Fixed Income Securities are debt instruments issued by companies or governments in exchange for a loan, offering returns in the form of a fixed interest rate, making them popular for conservative investors. Common types include: - Certificates of Deposit (CDs). - Corporate Bonds. - Municipal Bonds. - Treasury Bonds. - Treasury Bills. These securities do not provide ownership or equity in the issuing company but promise to return the principal along with interest upon maturity. The interest rate, or coupon rate, is influenced by the issuer's creditworthiness and prevailing government interest rates. In case of liquidation, fixed income securities provide seniority of claim, meaning investors are paid before equity shareholders, making them a safer investment.
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