What are the three types of investors classified in securities?

The correct classification of investors in securities includes retail, institutional, and accredited investors.

Retail investors are individual investors who buy and sell securities for their personal accounts. They typically have smaller amounts of capital to invest compared to institutional investors.

Institutional investors, on the other hand, are organizations such as banks, insurance companies, pensions, and mutual funds that invest large sums of money on behalf of their clients or for their own purposes. They often have greater access to financial resources and more sophisticated investment strategies.

Accredited investors are individuals or entities that meet specific criteria set by the Securities and Exchange Commission (SEC) regarding income, net worth, or professional experience, allowing them to invest in more complex investment opportunities, like private placements, that are not available to the general public.

Understanding these classifications helps to identify the different motivations and limitations of various types of investors in the market.