Friday, May 31, 2019

What are the security features that are being provided to a person in the stock market?

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For a person, the stock market provides security through bonds and stocks. Stock security features allow traders to vote and get periodic dividends based on the company’s profitability.

Bond security features guarantees a person for a fixed rate of return, called the coupon rate, in exchange for use of the invested funds much like a Bank Loan. Bond security provides a specific par value, coupon rate, and maturity date. At the time of maturity, the issuing entity repays the full par value of the bond.

Preference Share Securities features allow a person to get a fixed dividend, much like a bond. If the issuing company goes bankrupt then preferred shareholders can grant a higher claim on funds than their common counterparts.

So, these are the most common securities that a person can get in the Stock Market.

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