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Financial assets - Coggle Diagram
Financial assets
Financial asset: an asset that represents a promise to distribute cash flows some time in future.
There are too many instruments:
Treasury bills, federal funds, commercial paper.
Common equity
External equity: common stocks and refer stocks
Internal equity: retained earning
Debt
features
priority to assets and earnings
principal value, face value, maturity value and par value
Interest payments
Discounted securities
Maturity date
Control of the firms
Short term debt
Long term debt
Corporate bonds
Bond ratings
moody´s investors service
Standard and poor's corporation
Investment grade bonds
Criteria for rating bonds
Importance of bond ratings
Stock
Common stock
Represents ownership in a corporation
Classified
Closely held 85%
Publicly held 15%
Derivatives
Value depends on some underlying assets such as a stock or band
Option:
Is an option that gives the right to buy or sell an asset at a set price within a specified period of time
Convertibles:
bonds or preferred stocks that can be exchanged for common stock at the option of the holder
Futures:
Arrangement for delivery of an item at a set future date and at a set price