NAME: BULUS SEYILNAN TOKMINA

CLASS: ND IIB
REG NO: 21/144468
COURSE: EED 127
DATE: FEBRUARY, 2024

Questions
1. Explain portfolio investment, share, bond, debenture and broad
carriage
2. Briefly explain how stock m+arket work
3. Briefly explain what is capital market

1. Brief explanation of portfolio investment, share, bond, debenture and

broad carriage

Portfolio investment is the purchase of financial assets with the intention of

holding them for the long term and earning a return on the investment. These assets
can include stocks, bonds, mutual funds, and real estate. The goal of portfolio
investment is to grow your wealth over time and to generate income.

Shares are units of ownership in a company. When you buy a share of stock, you
become a part owner of the company. Shares can be bought and sold on a stock
exchange. The price of a share is determined by supply and demand. When a
company does well, the price of its shares typically goes up. When a company does
poorly, the price of its shares typically goes down.

Bonds are loans that you make to a company or government. When you buy a
bond, you are essentially lending money to the issuer of the bond. The issuer of the
bond agrees to pay you back the money you loaned them, plus interest, over a
certain period of time. Bonds are typically considered to be a safer investment than
stocks, but they also offer lower potential returns.

Debentures are a type of bond that is issued by a company. Debentures are not
secured by any specific assets of the company, which means that if the company
goes bankrupt, you may not get your money back. However, debentures typically
offer higher interest rates than other types of bonds.
 Broad carriage is a type of investment fund that invests in a wide range of assets,
such as stocks, bonds, and real estate. Broad carriage funds are designed to provide
investors with diversification, which can help to reduce risk.

2. HOW STOCK MARKET WORK

1. Companies go public: They sell shares through an Initial Public Offering
(IPO), raising capital to grow.
2. Investors buy shares: They hope the company does well, driving up the share
price and bringing them profit.
3. Buying and selling happens on exchanges: Like the New York Stock
Exchange (NYSE), where buyers and sellers meet and agree on prices.
4. Prices fluctuate based on supply and demand: More buyers than sellers mean
higher prices, and vice versa.
5. Investors can make money two ways:

 Capital gains: Selling shares for more than they bought them for.
 Dividends: Regular payments companies make to shareholders from their profits.

Remember: This is a simplified overview. The stock market is complex and

involves risks. Always do your research before investing.

3. CAPITAL MARKET

A capital market is a financial system where people and businesses can trade long-
term investments, like stocks and bonds. It's essentially a marketplace that connects
those with money (investors) to those who need money (businesses and
governments).

Here's a simple breakdown of how it works:

 Businesses and governments need money to grow and operate. They

issue securities (like stocks and bonds) to raise capital from investors.
 Investors buy these securities in exchange for a potential return on their
investment. This return could be in the form of dividends (for stocks) or interest
payments (for bonds)