Kuzmynchuk N., Doctor of Economics, Professor, V.N. Karazin Kharkiv National University, Ukraine

ORCID ID: 0000-0002-9844-3429
e-mail: nkuzminchuk@karazin.ua

Kutsenko T., PhD of Economics, Associate Professor, V.N. Karazin Kharkiv National University, Ukraine

ORCID ID: 0000-0001-7800-2987
e-mail: chkutsenko@gmail.com

Terovanesova O., PhD of Economics, V.N. Karazin Kharkiv National University, Ukraine

ORCID ID: 0000-0001-9323-8699
e-mail: a.u.terovanesova@karazin.ua

Bondarenko O., student, V.N. Karazin Kharkiv National University, Ukraine

ORCID ID: 0000-0002-5077-2653
e-mail: alex.bond0502@gmail.com

The Role of Securities as the Main Instrument of the Financial Market in International Business

Abstract. Introduction. In the modern world securities are the most common instruments of the financial market, allowing the companies and governments to raise funds for development and the investors to receive income from investments.

Purpose. The purpose of the study is to analyze the main types of securities their characteristics and functions in the financial market, in particular, to determine and study the relationship between securities and the capital market, assessment of the role of securities in international business and formation of price indicators and indices of financial market.

Results. The article examines the main types of securities used in the financial market, namely shares, bonds, derivatives and investment certificates. It is established that shares represent a share in the ownership of the company and grant the right to participate in voting and receive dividends. It is also noted that bonds represent the issuer’s obligation to repay borrowed funds and pay interest. Derivatives depend on the value of the underlying asset and can be concluded on the basis of financial contracts. The possibilities of derivatives are described, in particular their role in leverage and risk hedging, the transparency of derivatives trading on stock exchanges and the possibility of gaining access to various markets and assets through the use of derivatives are noted. Investment certificates are considered as a type of securities that combine funds of various investors and are managed by professional market participants. The relationship between securities and the capital market in the financial system is studied. It is noted that the capital market plays an important role in providing access to capital for companies and investment opportunities for individual investors. In particular, the role of stock indices in the financial market is considered.

Conclusions. Securities today play a significant role in the financial market and perform the various functions related to raising capital, generating income, diversification of financial portfolio, protection against inflation and other financial risks, providing liquidity to capital markets and access to them, and also provide price openness and transparency in the financial market, which allows its participants to obtain potentially high profits.

Keywords: securities; shares; bonds; derivatives; investment certificates; capital market; international business.

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