What are the three capital market instruments and explain them?
The three capital market instruments and their explanations are as follows
- Share, Share is a sign of ownership of a person or entity in a company or limited liability company in the form of a piece of paper that explains that the owner of the paper is the owner of the company that issued the securities. In stocks there are the terms dividend, capital gain, and capital loss, capital loss is the difference in the selling price which is lower than the purchase price of shares so that the share owner loses, while the capital gain is the difference in the selling value which is higher than the purchase price of the shares so that the share owner gets a profit from buying and selling shares or called dividends.
- Bond. A bond is a letter of acknowledgment of debt from a company with the ability to return the principal and interest periodically at a stipulated time.
- Derivative, A derivative is a contract between two parties that derives its value/price from an underlying asset. In Indonesia, there are three types of derivatives, namely mutual funds, proof of rights, and warrants.
