Question

Define the three terms and give examples where relevant.

1. IPO

2. Debt instruments

3. Publicly traded

Thank you!

Answer 1

1. IPO - Initial Public Offering; its the 1st time shares of a company are offered/ brought to public for sale. Eg: Facebook went IPO in 2012

2. Debt instruments: Its a loan given with interest payable by the receiver to the creditor. It can encompass many forms such as deposits, T- bills, government bonds, corporate bonds etc.

3.Publicly traded - means traded in a stock exchange and the share is available for sale and purchase by the public. Eg: Google is a publicly traded company (As opposed to privately held firms)