Glossary of financial terms

A security representing borrowed funds that must be repaid over a fixed time at a fixed interest rate.  Can be issued by a government or a corporation.Examples include bonds, debentures and commercial paper.

Derivatives are financial instruments whose value is derived from another type of security such as bonds, stocks, commodities, currencies etc that underly it. Derivatives can be used to hedge risk (concerned with the underlying security) or for speculative purposes (purely the profit on buying/selling at the right time). Examples are futures and options.