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Here is the question and my answer that I need to expand. Please help.

Question 3 A. "Capital market instruments are fixed-income obligations that trade in the secondary market, which means you can buy and sell them to other individuals or institutions." - Expound the types of securities.

Answer

In the secondary market (where continuous trading occurs) investors can trade with individuals and institutions for some instruments, or on a securities exchange for other instruments. Conversely, the primary market is where instruments are traded for the first time. Contrary to the statement, instruments may provide not only fixed incomes, but also variable incomes. The main instruments are explained:

1. Shares form the capital of a company, divided into a number of units. One with shares is expressed as a "shareholder", and regarded as having a stake of ownership. Equity shares (or "common stock") provide investors a participating role in the company's decisions, with a varying dividend. Preference shares provide a fixed dividend with no participation in the company's running;
2. Debentures are short/medium-term loans to a company, not secured by physical assets/collateral. They have a fixed maturity period and interest rate. These are issued under common seal of the company and are considered less stable than bonds;
3. Bonds are long-term loans to companies, institutions and governments, which are secured by physical assets/collateral. They have a defined maturity and interest rate (unless specifically variable), and are considered more stable than debentures;
4. Derivatives are financial contract which derive their value an underlying source/instrument. Examples are futures, options, swaps and exchange traded funds. Their prices fluctuate depending on the underlying security.

[what is considered to be the best instrument? Should there be diversity?]

[are there any particularly good or bad examples of evaluation? Any cases?]

In summary, it is the responsibility of the investor to analyse and decide which instruments to trade, in order to meet the objectives of the investor portfolio aims.