Underlying Assets

In this section we will study the characteristics of securities that can be bought and sold in the different stock markets, public funds, debentures, stocks,  short-term financial assets and warrants. We will also introduce investment funds and underlying investment societies.

Features and classifications of securities
Securities, also called commerce bonds, are documents that represent debts and capital of public or private entities. Securities are susceptible to be bought or sold in financial markets.

There are many classifications for securities. For example, if the classifications is done according to the type of income it offers, they can be divided in:

Fixed income bonds are securities that give you the right to get a fixed interest calculated based on a percentage over the nominal value. The state´s debt, debentures and bonds ar examples of fixed income bonds (securities). The rights given are only economic ones (interests and reimbursement of capital). Monetary assets can also be part of this type of these securities: basically promissory notes.

Variable-income bonds: its dividend is not fixed since it depends of the volume of benefits that is obtained by the issuing society. Stocks, which give dividends if the issuing company gets positive results, and participation in investment funds are examples of this type of commerce bonds. Other variable-income commerce bonds are warrants. Stocks give political (vote) and economic (dividends, participation in liquidations of the society). They also give the so called preference right of subscription that occurs when the society issues new stocks. These rights, as in warrants, are also quoted in the market

We can also classify commerce bonds according to the public or private character of the issuing entity:

Public bonds: in these bonds, the issuing entity is public (city hall, state, autonomous communities, public companies, etc.). The public debt of the state, debentures official credit entities or any other official organisms and Treasury bonds, are examples of public bonds.

Private bonds: are bonds issued by private companies. For example, stocks from private companies are private commerce bonds, participation in individual funds, promissory notes of a company and credit entities.