What are securities write any two features of securites?
Answers
Securities commonly refers to any form of negotiable financial instrument that holds some type of monetary value.Its legal definition varies by jurisdiction where in some cases the term excludes financial instruments other than equities and fixed income instruments and in some areas it includes some instruments that are close to equities and fixed income, e.g., equity warrants.
Securities can be broadly categorized into two distinct types:Debts and Equities
Debt Security refers to money that an entity has borrowed and is obliged to pay back. All the arrangement is pre decided in advance, including amount of money to be borrowed, at what interest rate, plus renewal or maturity date.
A certificate of deposit (CD), for example, is a security. So are corporate bonds, government bonds, and preferred stock.
Equity security refers to the ownership interest in a company by shareholders, such as shares . A holder of an equity security can profit from capital gains.
If the company makes a good profit, the equity security holder shares in this gain. This is not the case with a holder of a debt security. A debt security only gives you interest and the repayment of the capital
A plain definition of a security can be a proof of ownership or debt that has been given a value and which can be sold when needed.
For an owner, security represents an investment or rights to ownership over which the person can gain profit.
Examples are stocks and bonds.
Two features of securities include investment and collateral.
An investment can be made when there is ample security while collateral can be provided for accessing more capital or goods against it for a specific time.