Visual Guide to Financial Markets

Companies

Companies have more ways to raise money than the government does. They can borrow by selling the equivalent of Treasury bills and by making other arrangements to borrow funds for a year or less. They can sell notes and bonds, occasionally or regularly. They can sell shares, which enables them to bring in new owners and allows current investors to increase their stakes.

Each of these investments can be riskier than handing over money to a government. Companies can’t compel anyone to buy their products or services, as the government can. There isn’t any printing press that can come to their aid during business slumps.

These investments ...