What is a Financial Security?
A financial security is some type of financial instrument that is negotiable and has a recognized financial worth. Usually referred to simply as securities, the financial security can take on several forms. Generally, a financial security will have the potential to generate some additional return above face value for either the holder of the issuer of the security. One common example of a financial security is a debt security. Primarily securities of this type include bonds, debentures, and banknotes. A bond issue normally provides a fixed return above the purchase price or face value of the instrument. Debentures are written acknowledgments of debt owed and can be used by the lender to designate an asset. Banknotes are essentially promissory notes that can be called at any time and as such also represent a negotiable asset. Equity securities are a second classification of financial securities. Within this category, the financial security may be stock of some type. This would include c
