Government Securities

The Central Government and the State Governments issue securities periodically for the purpose of raising loans from the public. There are 2 main types of Government securities:

Dated Securities: have a maturity period of more than 1 year
Treasury Bills: have a maturity period of less than 1 year

Equity shares

Equity shares represent proportionate ownership in a company. Investors who own equity shares in a company are entitled to ownership rights, such as:

Share in the profits of the company (in the form of dividends),
Share in the residual funds after liquidation / winding up of the company,
Selection of directors in the board, etc.

Preference shares

Preferential shareholders enjoy a preferential right over equity shareholders with regards to ordinary shareholder.

Bonds

A bond is a debt investment with which the investor loans money to an entity (company or government) that borrows the funds for a defined period of time at a specified interest rate.

Debentures

A debenture is the most common form of long-term loan taken by a company. It is usually a loan repayable at a fixed date, although some debentures are irredeemable securities; these are sometimes called perpetual debentures. Most debentures also pay a fixed rate of interest, and this interest must be paid before a dividend is paid to shareholders

What are the different types of financial instruments?

The following are the different types of financial instruments-
Debentures
Bonds
Preference shares
Equity shares
Government securities

Money Market

The money market is a subsection of the fixed income market. We generally think of the term "fixed income" as a synonym of bonds. In reality, a bond is just one type of fixed income security. The difference between the money market and the bond market is that the money market specializes in very short-term debt securities (debt that matures in less than one year). Money market investments are also called cash investments because of their short maturities. Money market securities are essentially IOUs (an abbreviation of the phrase "I owe you") issued by governments, financial institutions and large corporations. These instruments are very liquid and considered extraordinarily safe. Since they are extremely conservative, money market securities offer significantly lower returns than most of the other securities.

Stock Market

A stock market is a market for the trading of publicly held company stock and associated financial instruments (including stock options, convertibles and stock index futures). Many years ago, worldwide, buyers and sellers were individual investors and businessmen. These days markets have generally become "institutionalized"; that is, buyers and sellers are largely institutions whether pension funds, insurance companies, mutual funds or banks. This rise of the institutional investor has brought growing professionalism to all aspects of the markets.

Financial Market

The financial markets are markets which facilitate the raising of funds or the investment of assets, depending on viewpoint. They also facilitate handling of various risks. The financial markets can be divided into different subtypes:
Capital markets consists of:

Stock markets, which facilitates equity investment and buying and selling of shares of stock. Bond markets, which provides financing through the issue of debt contracts and the buying and selling of bonds and debentures.
Money markets, which provides short term debt financing and investment.
Derivatives markets, which provides instruments for handling of financial risks.
Futures markets, which provide standardized contracts for trading assets at a forthcoming date.
Insurance markets, which facilitates handling of various risks.
Foreign exchange markets

Capital Market

The capital market is the market for long-term loans (debentures & bonds) and equity capital. Companies and the government can raise funds for long-term investments via the capital market. The capital market includes the stock market, bond market and primary market. Thus, organized capital markets are able to guarantee sound investment opportunities.

The capital market can be contrasted with other financial markets such as the money market which deals in short term liquid assets and futures markets which deal in commodities contracts.