FORONDA, JAMES RHANDAL A.

COURSE & YEAR: BSBA FM-3

GALVEZ, ANGELO DATE: 9/9/23

A. FIXED INCOME INVESTMENTS

• Savings Accounts
- A savings account is a deposit account that pays interest at a bank or other financial
institution. Though these accounts typically pay only a low interest rate, their safety and
dependability make them an excellent choice for storing cash for short-term needs.
• Capital Market Instruments
a) U.S. Treasury securities
- Treasury securities are among the most secure investments because they
are backed by the full faith and credit of the United States government.
b) U.S. Government agency securities
- Government securities are loans made to the government by investors.
They are considered safe investments because they are backed by the United
States government. Government agency securities are loans to government
agencies or private corporations backed by the federal government.
c) Municipal bonds
- The term "municipal bond" refers to a type of debt security issued by
municipalities, counties, and states. They are frequently used to fund capital
expenditures such as the construction of highways, bridges, or schools.
Municipal bonds function similarly to loans, with bondholders becoming
creditors. Bondholders/investors are promised interest on their principal
balance in exchange for borrowed capital, which must be repaid by the
maturity date. Municipal bonds are frequently exempt from most taxes,
making them appealing to people in higher tax brackets.
d) Corporate bonds
- A corporate bond is a type of debt security sold to investors by a
corporation. The company receives the capital it requires, and the investor
receives a predetermined number of interest payments at either a fixed or
variable interest rate.
i. Secured bonds
- A secured bond is one that is backed by specific assets that protect
bondholders in the event that the issuer defaults. The assets can be
in the form of investments, plant and equipment, or real estate that
are pledged to the bondholder as security.
ii. Debentures
- A debenture is a type of bond or other debt instrument that is
secured by collateral but not guaranteed. Because debentures lack
collateral backing, they must rely on the issuer's creditworthiness
and reputation for support. Debentures are frequently issued by
corporations and governments to raise capital or funds.
iii. Subordinated bonds
- A subordinated bond is a type of bond that receives payment only
after other higher-priority bonds, known as senior unsubordinated
bonds, have been paid in the event of a debtor's bankruptcy. These
subordinated bonds are unsecured, making them riskier compared
to older, higher-priority bonds
iv. Income bonds
- An income bond is a type of debt security in which the investor is
FORONDA, JAMES RHANDAL A. COURSE & YEAR: BSBA FM-3
GALVEZ, ANGELO DATE: 9/9/23

promised only the face value of the bond, with any coupon
payments paid only if the issuing company has enough earnings to
cover the coupon payment. An adjustment bond is a type of income
bond in the context of corporate bankruptcy.
v. Convertible bonds
- A convertible bond is a type of debt security that provides an
investor with a right or an obligation to exchange the bond for a
predetermined number of shares in the issuing company at certain
times of a bond's lifetime. It is a hybrid security that possesses
features of both debt and equity.

• Preferred Stocks
- Preferred stock is a type of equity that represents ownership of a company as well as the
right to profit from its operations. Preferred stockholders have a greater right to
distributions (such as dividends) than common stockholders.

B. INTERNATIONAL BOND INVESTING

- An international bond is a debt obligation issued in the native currency of a non-domestic entity.
The majority of international bonds are corporate bonds, but some government bonds can be
invested in. International bonds diversify portfolios but are subject to currency risk.
a) Euro Bond
- A Eurobond is a debt instrument denominated in a currency other than the home
currency of the issuing country or market. Eurobonds are frequently classified
according to the currency in which they are denominated, for example, euro-dollar
bonds or Euro-yen bonds. Eurobonds are often referred to as external bonds
because they are issued in a foreign currency. Eurobonds are important because
they allow organizations to raise capital while also allowing them to issue them in a
different currency.
b) Yankee Bond
- A Yankee bond is a debt obligation denominated in U.S. dollars that is publicly
issued in the U.S. by foreign banks and corporation, and sometimes even
governments. Yankee bonds are subject to U.S. securities laws, as they trade on U.S.
exchanges.
c) International Domestic Bond
- An international bond is generally a debt obligation that is issued by a non-
domestic entity in its native currency. Most international bonds are corporate bonds
but some government bonds are investable assets. International bonds offer
portfolio diversification but are subject to currency risk.
FORONDA, JAMES RHANDAL A. COURSE & YEAR: BSBA FM-3
GALVEZ, ANGELO DATE: 9/9/23

C. EQUITY INSTRUMENTS
- Equity instrument: Any contract that demonstrates a residual interest in an entity's assets after
deducting all liabilities. Fair value: the amount for which an asset could be exchanged or a liability
settled in an arm's length transaction between knowledgeable, willing parties.
1. Common Stock
- Common stock is a security that represents ownership in a corporation. Holders of
common stock elect the board of directors and vote on corporate policies. This form
of equity ownership typically yields higher rates of return long term.
2. Common stock classifications
- Companies will occasionally issue multiple classes of common stock, each with
their own set of rights and privileges. Class A, Class B, and so on are examples of
common classifications. For instance, Alphabet Inc., Google's parent company, has
two classes of common stock: Class A shares (GOOGL) with voting rights and Class C
shares (GOOG) without voting rights.
3. Acquiring common equity
- Acquiring foreign equities entails purchasing stock in companies that are listed on
foreign stock exchanges. This enables investors to diversify their portfolios by
investing in firms from various countries.

D. SPECIAL EQUITY INSTRUMENT

- rights to buy or sell at a stated price for a period of time
1. Warrants
- A warrant grants the holder the right, but not the obligation, to purchase common
shares of stock directly from the company at a predetermined price for a set period
of time.
2. Puts and Calls
-Options contracts include puts and calls. A "put" option gives the holder the right to
sell a certain number of shares at a specified price. A "call" option grants the holder
the right to purchase a specified number of shares at a fixed price.

E. FUTURES CONTRACT
1. Commodity Futures
- These contracts are used by producers, manufacturers, and traders to hedge
against price fluctuations in commodities like wheat, oil, and metals. They help
manage the risk associated with the volatile nature of commodity prices.
2. Financial Futures
-These contracts are utilized for hedging and speculation in financial markets. For
example, they can be based on stock market indices, interest rates, or currency
exchange rates. Financial futures provide a way to manage exposure to market
movements.
FORONDA, JAMES RHANDAL A. COURSE & YEAR: BSBA FM-3
GALVEZ, ANGELO DATE: 9/9/23

F. INVESTMENT COMPANIES
- An investment company is a corporation or trust that invests the combined capital of its investors
in financial securities. This is usually done through a closed-end fund or an open-end fund (also
known as a mutual fund).
1. Money Market Funds
-These funds focus on short-term, highly liquid investments. They are suitable for
investors seeking stability and preservation of capital, offering a relatively low-risk
option compared to other types of investments.
2. Bond Funds
-Within this category, there are various types including government bond funds,
corporate bond funds, and municipal bond funds. They offer diversification within
the fixed-income market and can range in risk levels depending on the types of
bonds included.
3. Bond Funds
-Within this category, there are various types including government bond funds,
corporate bond funds, and municipal bond funds. They offer diversification within
the fixed-income market and can range in risk levels depending on the types of
bonds included.
4. Common Stock Funds
- These funds provide exposure to a broad range of companies and industries. They
can be categorized by factors like market capitalization (large-cap, mid-cap, small-
cap) or investment style (growth, value, blend).
5. Balanced Funds
- Also known as hybrid funds, they strike a balance between stocks and bonds. They
aim to provide a mix of potential capital appreciation and income generation,
making them suitable for investors seeking a moderate level of risk.
6. Index Funds
-These funds aim to replicate the performance of a specific market index, such as the
S&P 500. They tend to have lower management fees compared to actively managed
funds, as they don't involve extensive research and decision-making.
7. ETFs (Exchange-Traded Funds)
-ETFs are similar to index funds but trade on stock exchanges like individual stocks.
They offer flexibility in trading throughout the day and cover a wide range of asset
classes, including stocks, bonds, commodities, and more.
FORONDA, JAMES RHANDAL A. COURSE & YEAR: BSBA FM-3
GALVEZ, ANGELO DATE: 9/9/23

G. REAL STATE
- Real estate is defined as land and anything permanently attached to it or built on it, whether
natural or man-made. Residential, commercial, industrial, raw land, and special use are the five
main types of real estate.
1. Real Estate Investment Trust (REIT)
- REITs are required by law to distribute a significant portion of their earnings to
shareholders, making them an attractive option for income-seeking investors. They
offer exposure to real estate without the direct responsibilities of property
ownership.
2. Direct Real Estate Investment
-This involves purchasing physical properties directly. It requires active
management and can involve tasks such as maintenance, tenant relations, and
property appreciation strategies.

H. LOW LIQUIDITY INVESTMENT

- Liquidity regulations are financial regulations that ensure financial institutions (such as banks)
have the necessary assets on hand to prevent liquidity disruptions caused by changing market
conditions.
a) Antiques: The value of antiques often appreciates over time due to their rarity,
craftsmanship, and historical significance. Specialized markets and collectors are
typically involved in their trading.
b) Art: The value of art can be influenced by factors like the artist's reputation, the
historical period, and the rarity of the piece. It often requires expertise to assess
authenticity and value.
c) Coins and Stamps: Collectors seek coins and stamps for their historical and
aesthetic appeal. Their value can vary greatly based on factors like rarity, condition,
and demand among collectors.
d) Diamonds: The "four Cs" (carat, cut, clarity, and color) are crucial factors
determining the value of a diamond. They are considered a store of value, but
liquidity can be lower compared to other investments, and the market is influenced
by various factors.