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What are fixed income securities? The two best-known asset classes are equity and fixed income securities. When you buy equities, you are essentially buying part ownership of a company. You therefore participate in both its profits and losses, measured by any dividend income you receive plus capital gains or losses from the ups and downs of the stock market. In contrast, a traditional fixed income security is essentially an IOU - an obligation stating that the borrower (known as the issuer) will repay the borrowed money on a certain date, called the date of maturity. In addition, as the name suggests, many fixed income securities pay regular interest or income to investors at a fixed interest rate, known as the coupon rate....Discover more.
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