Submitted to: Sir Ali Zeb

Submitted by: Habib Ur Rehman

Roll no: 19
BBA 7TH
Session: 2017-21
provide the detail knowledge about financial securities, short term and long term securities
as well.
Basically a security is that when we go in a market for sell or buy then security is something that we sell
and earn money or buy something with money that means which is financial tradable asset. Nowadays,
it is more commonly electronic.

A financial security is some saleable right to receive a sequence of future payments, the size of which
can either be guaranteed and known in advance (risk free) or determined be the outcomes of some
uncertain future event (risky).

By saleable, we mean that the investor can sell the security any time before the maturity date of
another investor. How much other investor would be willing to pay for the security is hinged on the
remaining payments, other investment opportunities, prevailing market conditions etc.

Financial security is categorizing into three types.

1. Debt security
2. Equity security
3. Derivatives security

1. Debt security:
Debts security aye usually government and corporate issued. This is because businesses and
organization needs money to borrow and expand so they borrow money from the public
and pay the interest on the borrowed money. Debt securities are lending money.
Debt security represents money that’s borrowed and must be repaid, with the dimensions
of the loan, rate of interest and maturity. These securities are issued by the governments, a
company or a individual. And sold to someone for a specific amount along with a promise of
interest plus repayments. A debt security includes a maturity date, a specified rate of
interest and fixed amount.
Example of such securities comprise a bond, treasury notes and a bank notes. Notably while
purchasing a bond and invest that is not get any right to participate in the decision making
process while he or she is in title to the reinvestment interest and principle.
Bond are saleable rights to receive a finite sequence of guaranteed payments. Bonds are
generally characterized as risk free securities but in actuality face some risk. These risk
include:
 liquidity risk
 term risk
  inflation risk
 default risk

2. Equity security:
Equity security that is common stock means we buy common stock or we
have shares, then we have equity type security that we sold again which is
again financial tradeable asset.
Equity security represents ownership of a company such as stock. If you
can own shares of a company you can profits of an increasing shares prices
or dividends. Equity securities involves owning a piece of a company.
Shares are categories into equity securities segment. Or shareholder owns
apart of firm which issues the shares in a question shareholder get right to
participate in the firm’s decision making process and can receive dividend
too if the firm operates profit. It is imperatively note that equity securities
fall or rise in values in line with the firm and financial market spot use.
Equity security and risk means a stockholder can sells stock to another
person like a bond. A saleable right to receive an indefinitely long sequence
of future payments also known as equity security.
3. Derivatives security:
The third kinds are the derivatives security that offer to right the trade one financial security
at presided terms. For instance, option contracts are classified under derivatives security
which provides an investor that right to sell or buy shares at specific price of an existing
security by an certain date in future.
These derivatives include forward, future, option and swap. These re financial instruments
whose payoff depends on the value of another financial variable (price of bond, price of
stock, exchange rate etc.). These includes future and forward, options, swap and mort age
backed security.

Short term and long term securities

Short term securities:
Short term securities is known as marketable securities. These are securities or debt
that are to be sold within a year. These are financial instruments like government
bonds, common stocks or deposits that can be easily converted into cash (at
reasonable price). These securities issued either for equity securities or for debt
securities of a publicly listed company.
Characteristics of short term security:
1. Maturity period is one year or less.
2. To bought or sold on a public stock exchange is the ability.
3. Higher liquidity and lower risk.
4. Not cash or cash equivalents.
How marketable securities work:
 Held for trading
  Held for maturity
 Available for sale
Types of short term securities
1. Marketable debt securities
2. Marketable equity securities

Long term securities:

Basically long term securities are traded in capital markets. Bonds are representatives of long
term securities. These securities have maturity of longer than one year.
These can be describes as long term debt instruments representing the issuer contractual
obligation. Long term debt securities today are prevailing in the global markets.
Preferred stock are equity security, which have pay dividends and infinitive life. ownership
interest of corporation of the stock holder is the common stocks.
Advantages/benefits:

 It is less time consuming because investor don not need to monitor on daily basis.
 Long term securities have low transaction fee because there is less transaction fee and
less taxes fees.
Disadvantages:

 It is slowest way to make money because you need to wait for long time.
 The annual returns are lower than traders.

Bond is also referred as borrowed capital.Bond is a financial security, explain its benefit and
enlist the prize bond categories issued in Pakistan.
Bond:
Bond also known as a fixed income security. It is a debt instrument created for the purpose of
raising capital. They are essentially loan agreements between the bond issuer and an investor,
in which the bond issuer is obligated to pay a specified amount of money at specified future
dates.

Bonds in Pakistan:
Various types of government bonds issued by the govt. of Pakistan are as follows:
1. Pakistan investment bonds
2. US special dollars bonds.
 3. Wapda bonds
4. National saving bonds.
5. Sukuk
Benefits:

1. Coupon interest:
All bonds have fixed rate of interest. If it is not fix then they tell us a range that interest
level fall in these range. It means that risk is minimize.
2. Face value:
Basically face value is the principle amount or par value. This is mentions because that
when investor or companies return it then they for it that this is the face value.
3. coupon rate:
The rate at which issuer pays interest to investors is known as a coupon rate.
4. Duration or maturity rate:
Company return the principle amount back to investors on specific date. Maturity range
can from low three years to high thirty years.
5. Safe:
Bonds are safe investment than stock.
6. receive recovery amount:
If any company goes bankrupt, bondholders will receive recovery amount.
7. Tax free income:
Bonds that are issued by the state, country or city can even provide tax-free income.

Prize Bond is the best investment in Pakistan, it is considered as the Gold Investment and it is a
bearer type of investment security, which gives no premium or profit. Prize bond are available in
the denominations of Rs. 100, Rs. 200, Rs. 750, Rs. 1500, Rs. 7500, Rs. 15,000, Rs. 25000, Rs.
40,000 and Rs. 40000 Premium Bonds

Prize Bond is basically a lottery bond offered by the National Savings Pakistan (Ministry of
Finance) and issued on behalf of the Government of Pakistan.

Prize Bonds in Pakistan are issued in proper series, and every series is limited to 1,000,000
bonds (one million numbers). Every draw is held quarterly, however no interest or profit is given
on these bonds. Every quarter the lucky winners are announced via lucky draws. These lucky
draws are held in major cities of Pakistan, about 36 times annually. According to numbers, every
year 70,600 Pakistanis win Rs. 1.6 billion rupees in prize money.

Prize Bond in Pakistan are available in the following denominations

Prize Bonds Denomination List

 Amount 1st Prize Prizes 2nd Prize Prizes 3rd Prize Prizes
Rs. 100 700,000 1 200,000 3 1000 1199
Rs. 200 750,000 1 250,000 5 1250 2394
Rs. 750 15,00,000 1 500,000 3 9300 1696
Rs. 1500 3,000,000 1 1,000,000 3 18,500 1696
Rs. 7500 15,000,000 1 5,000,000 3 93,000 1696
Rs. 15000 30,000,000 1 10,000,000 3 185,000 1696
Rs. 25,000 50,000,000 1 15,000,000 3 312,000 1696
Rs. 40,000 75,000,000 1 25,000,000 3 500,000 1696
40,000 Premium 80,000,000 1 30,000,000 3 500,000 1696

What is the First Prize of Rs. 100 Prize Bond?

The first prize of Rs. 100 Prize bond is 700,000. The second prize is Rs. 200,000 which has total 3 prizes,
and third prize is Rs. 1000, which has total 1200 prizes.

Q. What is the First Prize of Rs. 200 Prize Bond?

The first prize of Rs. 200 Prize bond is 750,000. The second prize is Rs. 250,000 which has total 3 prizes,
and third prize is Rs. 1000, which has total 1250 prizes.

Q. What is the First Prize of Rs. 750 Prize Bond?

The first prize of Rs. 750 Prize bond is 15,00,000. The second prize is Rs. 500,000 which has total 3 prizes,
and third prize is Rs. 9300, which has total 1696 prizes.

Q. What is the First Prize of Rs. 1500 Prize Bond?

The first prize of Rs. 1500 Prize bond is 30,00,000. The second prize is Rs. 10,00,000 which has total 3
prizes, and third prize is Rs. 18500, which has total 1696 prizes.

Q. What is the First Prize of Rs. 7500 Prize Bond?

The first prize of Rs. 7500 Prize bond is 15,000,000. The second prize is Rs. 50,00,000 which has total 3
prizes, and third prize is Rs. 93000, which has total 1696 prizes.
Q. What is the First Prize of Rs. 15000 Prize Bond?
The first prize of Rs. 15000 Prize bond is 30,000,000. The second prize is Rs. 10,000,000 which has total 3
prizes, and third prize is Rs. 185000, which has total 1696 prizes.

Q. What is the First Prize of Rs. 25000 Prize Bond?

The first prize of Rs. 25000 Prize bond is 50,000,000. The second prize is Rs. 15,000,000 which has total 3
prizes, and third prize is Rs. 312000, which has total 1696 prizes.

Q. What is the First Prize of Rs. 40000 Prize Bond?

The first prize of Rs. 40000 Prize bond is 75,000,000. The second prize is Rs. 25,000,000 which has total 3
prizes, and third prize is Rs. 500,000, which has total 1696 prizes.

Q. What is the First Prize of Rs. 40000 Premium Prize Bond?

The first prize of Rs. 40000 Premium Prize bond is 80,000,000. The second prize is Rs. 30,000,000 which
has total 3 prizes, and third prize is Rs. 600,000, which has total 1696 prizes.
Q. What is the validity period of a prize bond?
There is no such validity, the Prize bonds remains valid till the scheme termination, and there is no
maximum age or expiry dates of the bonds.

Q. What is the Validity of Claiming the Prize?

Maximum time period to avail the prize is six years from the date of draw. So if you have won the prize
and you are unaware of it, simply search the results on our search pages and claim your prize.

Q. Do I need to pay Tax on Prize Bond Winning Amount?

If you win a prize than you will have to pay tax on the winning amount. Which is 15% for FBR NTN
holders (filers) and 25% for non tax filers.

Q.

Write the procedure of prize bond lucky draw

Prize bond draw is held by a committee constituted by Central Directorate of National Savings and open
to general public. Winning prize bonds are drawn through Hand operated draw machine, which is
usually operated by special children in front of Committee members and general public attending the
draw ceremony. Draw machine is also checked by general public before the start of draw