Why does the investing public need fixed-income securities? Doesn't the stock market, where common stock is bought and sold, provide enough investment options?
In the capital market lots of options are available to investors which mainly classified in three broad categories: 1 Debt securities usually called fixed income securities 2 Equity shares that provide variable return in form of capital appreciation and dividends. Some investors are attracted to fixed income securities the reason for the same have varied based on investors risk preference to retirement planning. Some requires it for their living expenses while some requires it for reinvestment purposes. In the stock market also preference shares provides some fixed income but also there are cumulative or non-cumulative category exists. Non-cumulative preference shares usually provide fixed income.