A stock exchange is a marketplace where stockbrokers, traders, buyers, and sellers can trade in securities.

The largest exchanges have thousands of listed companies. These companies sell shares of their business, giving the general public the opportunity to invest in them. The exchange keeps track of who bought how much, how much of what is on sale, makes sure that everything is sold according to the law, and that nobody cheats anyone. Every country usually has its own exchange, often more than one. The largest exchange is New York Stock Exchange. To get access to the exchange, an ordinary investor needs an intermediary - a broker.

A broker is an intermediary who has access to the exchange. Private investors buy and sell securities on the exchange through a broker. Usually, for a certain commission fee.

A Broker is a company that has obtained all the necessary licenses for the exchange, abides by its rules and pays its tariffs. A broker provides private investors with access to the exchange and charges them a commission for this. The investor opens an account with the broker, deposits the money and tells the broker what and how much to buy or sell at the exchange with this money.

There are many different " sections" on the stock exchange - they are called markets. On the markets you can buy stocks, currencies, precious metals and even wheat (commodities).

First of all, most common section is where stocks (equities) are traded - the stock market. In addition to stocks, you can buy bonds and ETFs there - these are the most popular instruments among private investors.

To buy a bond is to lend the government or a company money at interest.

Let's say that a company wants to expand its production and needs money to do so. The investor then gives the company the money and in return he gets a bond: a receipt, which states how much money the company has taken, how much it is supposed to pay back, and in what time frame.

Bonds can be issued by companies, or by an entire country or region. Government bonds are the safest, but their yield is not much different from a deposit. Regional bonds are more profitable, and corporate bonds (company bonds) are even more profitable. But the risk grows with the benefit.

A share is a part of a company, a share in its business. If you buy a share, you effectively become a co-owner of the company and can claim a share of its profits.

The owner of a share has two options to make money: on the difference in the value of the shares (buy cheaper, sell higher) or on dividends, which is when the company shares part of its profits with the shareholders.

For example: Imagine that you have a farmer friend who offers you to buy a cow in a halftime pool. Your share of the cow is a share. The cow will give milk, the milk will be sold - you will receive half the profit from the sale of milk. That milk profit is your dividend.

A dividend is a payment made by a company to its shareholders, usually as a distribution of profits.

When a company earns a profit or surplus, it is able to re-invest the profit in the business and pay a proportion of the profit as a dividend to its shareholders.

This term is used to describe an investment bond on which interest is paid by coupons.

In this case, the coupon is the interest payment received by a bondholder from the date of the issue until the date of maturity of a bond. Coupons are typically described in terms of the "coupon rate", which is calculated by adding the sum of coupons paid per year and dividing it by the bond's face value.

Security is a financial instrument implying various financial assets. A financial instrument is defined as a contract between individuals/parties that holds a monetary value.

Securities are fungible and tradable financial instruments used to raise capital in public and private markets. There are primarily three types of securities: equity—which provides ownership rights to holders; debt—essentially loans repaid with periodic payments; and hybrids—which combine aspects of debt and equity.

Is a type of fund that owns the underlying assets like: Bonds, Stocks, Currencies, Oil Futures, Gold bars.

Let's say you want to buy a share not just of a cow, but of every animal on the farm in general. But you don't have money for half of each animal. You'd be happy to buy 10% of each animal, but the farmer is willing to sell at least half - you can't buy 0.1 share on the stock exchange, only the entire thing. There are special funds - ETFs - for such cases. They have already bought a share of each animal, and investors (you) are invited to buy a share of their own share. If you bought 10% of that fund, you automatically own 10% of everything in that fund. If the fund had half of each animal, you become the owner of 10% of that half. An ETF's portfolio may consist of stocks or bonds of different companies, or it may track the price of some commodity. Each ETF decides how to form its portfolio.

A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt.

The combined holdings of the mutual fund are known as its portfolio. Mutual funds allow investors to pool their money together to invest in a diverse portfolio.Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund and the income it generates.

When you invest in a private equity fund, you are investing in a fund managed by a private equity firm — the Adviser.

Similar to a mutual fund or hedge fund, a private equity fund is a pooled investment vehicle where the adviser pools together the money invested in the fund by all the investors and uses that money to make investments on behalf of the fund. Unlike mutual funds or hedge funds, however, private equity firms often focus on long-term investment opportunities in assets that take time to sell with an investment time horizon typically of 10 or more years. A private equity fund is typically open only to accredited investors and qualified clients. Accredited investors and qualified clients include institutional investors, such as insurance companies, university endowments and pension funds, and high income and net worth individuals. The initial investment amount for a private equity investment is often very high.

Hedge funds pool money from investors and invest in securities or other types of investments with the goal of getting positive returns.

Hedge funds are not regulated as heavily as mutual funds and generally have more leeway than mutual funds to pursue investments and strategies that may increase the risk of investment losses. Hedge funds are limited to wealthier investors who can afford the higher fees and risks of hedge fund investing, and institutional investors, including pension funds.

An investment portfolio is all the assets you have invested in total.

Generally speaking, assets are not just stocks and bonds. It can be also bank deposits, a share in a startup, and income-generating real estate. Forming a portfolio is about finding the optimal mix of assets for you: what share of bonds and what share of stocks (that is, equity funds), how many different bonds should be in the portfolio, and how many different equity funds should be in the portfolio.

This whole process is characterized by one word - diversification. It is the allocation of money between different assets in such a way that returns and risk exposure satisfy your needs expectations

A certificate of deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time, such as 6 months, 1 year, or 5 years, and in exchange, the issuing bank pays interest.

When you cash in or redeem your CD, you receive the money you originally invested plus any interest. As with all investments, there are benefits and risks associated with CDs. The disclosure statement should outline the interest rate on the CD and say if the rate is fixed or variable. It also should state when the bank pays interest on the CD, for example, monthly or semi-annually, and whether the interest payment will be made by check or by an electronic transfer of funds. The maturity date should be clearly stated, as should any penalties for the “early withdrawal” of the money in the CD. The risk with CDs is the risk that inflation will grow faster than your money, and lower your real returns over time.

Inflation is a general upward movement of prices.

Inflation reduces purchasing power, which is a risk for investors receiving a fixed rate of interest. The principal concern for individuals investing in cash equivalents is that inflation will erode returns.

Interest is the cost of borrowing money, and the money you earn from your savings.

Interest is the cost of borrowing money, and the money you earn from your savings. In other words, if you borrow money from a bank, the interest is what you pay for your loan. When you put your money in a savings account, interest is the return you receive on your savings from the bank. Interest rates indicate this cost or return as a percentage of the amount you are borrowing or lending.

Interest rate changes can affect a bond’s value. If bonds are held to maturity the investor will receive the face value, plus interest. If sold before maturity, the bond may be worth more or less than the face value. Rising interest rates will make newly issued bonds more appealing to investors because the newer bonds will have a higher rate of interest than older ones.

‘Structured note with capital protection’ refers to any structured product that combines a bond with a derivative component—and that offers a full or partial return of initial invested capital at maturity.

Structured products in general do not represent ownership of any portfolio of assets but rather are promises to pay made by the product issuers (providers). Structured notes with capital protection (or guarantee) typically reflect the combination of a zero-coupon bond, which pays no interest until the bond matures, with an option or other derivative product whose payoff is linked to an underlying asset, index or benchmark. The underlying asset, index or benchmark can vary widely from commonly quoted market benchmarks to foreign equity indices, currencies, commodities, or "hybrid" baskets of various asset types.

All investments involve some degree of risk. In finance, Risk refers to the degree of uncertainty and/or potential financial loss inherent in an investment decision. In general, as investment risks rise, investors seek higher returns to compensate themselves for taking such risks.

Every saving and investment product has different risks and returns. Differences include: how readily investors can get their money when they need it, how fast their money will grow, and how safe their money will be. In this section, we are going to talk about a number of risks investors face. They include: Business, Volatility, Inflation, Interest rate, and Liquidity risks.