Preferred dividends are generally fixed or stated, whereas common dividends are paid at the discretion of the board of directors. Indebtedness is a loan of funds, usually for a specific period of time. Notes and bonds are promises to repay borrowed funds and to make periodic interest payments. Debentures are debt backed only by the general credit of the issuer. Interest on U.S. government debt is not taxed by the states.
Municipal bonds are debt securities issued by state and local governments.
Derivative securities are securities in which the value is derived from another security or asset. A futures contract is a security that represents an arrangement to buy or sell an asset at a fixed price at a fixed time in the future. A primary market is a market in which a security is first sold, raising funds for the issuer. A secondary market is a market in which assets are sold among investors. Exchanges are physical trading locations.