What differentiates Fixed Income from Stocks and Derivatives?
The following "Capital Market" classifications will help explain the differences:
- Fixed Income: yields a series of cash flows including principal payments and coupons
- Stock: represents partial ownership of a business. Note there is no strict boundary between Fixed Income securities and stocks, e.g. preferred stock pay like FI securities but represent optional ownership in the business
- Derivative: derives its value from other financial instruments
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