2007-02-28 00:53:36 · 4 answers · asked by nsnvasviz 1 in Business & Finance ➔ Investing
Equity is when you are a stockholder,owner of the company.Deravitive is a option and or warrant on the company stock,it gives you the right to purchase but not the obligation to purchase.Debenture is a bond of the company you the bond holder are a creditor of the company and company owes this money to you although it is not guaranteed because you are an unsecured creditor as opposed to secure creditor.
2007-02-28 01:18:28 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Equities are the shares / stocks of a company that can be traded on the stock exchanges. The number of shares of a company is exactly equal to the number of shares that a company issues.
Derivatives are contracts that derive their value from the value of the share/stock to which they are related. Ex: A contract for the March Futures of Infosys derives it's value from the value of Infosys share. Derivatives are not issued by the company. It's more like a virtual share that is valid for a limited time span. You can have as many as you want of derivatives contracts.
Debentures are issued by companies and are like a loan. The company that issues it, is required to pay an interest on the debenture value to the investor. If you buy a company's debenture then after a fixed duration of time the company will return your money with interest. This interest is usually slightly higher than
the bank interest rates.
2007-02-28 01:25:15 · answer #2 · answered by vinay t 1 · 1⤊ 0⤋
Debentures is a type of debt instrument that is not secured by physical assets or collateral. They are backed only by the general credit worthiness/reputation of the issuer.
Derivatives is an instrument whose price is dependent or derived from an underlying asset. Examples of derivatives include put/call options, futures contracts, and forward contracts.
Equities are just stocks representing an ownership interest in a security. These are the most commonly traded instruments for the general public.
2007-02-28 01:23:33 · answer #3 · answered by ropman1 4 · 0⤊ 0⤋
In many cases the terms derivative and debenture can describe the same financial instrument. One that is not directly tied to a physical asset.
2016-08-26 05:37:01 · answer #4 · answered by judy 1 · 0⤊ 0⤋