Security
| Security is a term used in finance that refers to a financial instrument that is fungible, transferable, and has a monetary value. A security can be a debt instrument, such as a bond, or a equity instrument, such as a stock. A security is a financial instrument that represents a claim on an underlying asset, such as a debt or equity instrument. The underlying asset can be a physical asset, such as a commodity, or a financial asset, such as a currency. A security is a debt instrument when it represents a loan that must be repaid with interest. A security is an equity instrument when it represents ownership in a company. A security is fungible when it can be exchanged for another security of the same type. For example, two bonds that have the same coupon rate and maturity date are fungible. A security is transferable when it can be sold or transferred to another party. For example, a bond can be sold in the secondary market. A security has a monetary value when it can be traded for cash. For example, a bond can be traded for cash in the secondary market. |
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