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Question 5 |
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List and explain five types of Securities traded in the Stock Exchange.
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Candidates were able to list the Securities traded in the Stock Exchange but some had difficulties in the explanations.
Stock: These are fully paid shares fixed in nominal values without any distinguishing numbers. They cannot be sold in units but in fractional amounts.
Bonds: Longterm securities issued by governments, companies and banks. They carry fixed rate of interest. It is also referred to as debentures when issued by Companies.
Gilt-edge Securities: It is issued by governments and well known companies, usually backed by substantial guarantee of payments of interest and capital. It is also
known as blue chips. But the candidates separated Gilt-edge securities from blue chips.
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