Overview of Finance Security


Finance security which is simply referred to as securities is a type of certificate that attests credit, the right to ownership connected with tradable derivatives or the ownership of stocks or bonds. It is a negotiable financial instrument with recognized financial value. It is available in different types but in general, they all have the potentials of yielding profit or return which is greater than their worth to their issuers of holders. Examples of securities are equity securities and debt security. The examples of the latter are banknotes, debentures and bonds while the examples of the formers are stocks.

There are different entities that can issue a finance security. Government agencies be it federal, state or municipality can issue finance security in form of bonds in order to fund a project aimed at the improvement of the society. It can also be issued by companies and corporations. This type of securities are referred to as shares. They are put up to the public for sales. Securities are normally sold at some interest rate. In a number of cases, government issued securities have lower interest rate than those that are issued by a business entity or commercial establishment. The reason why securities are issued in most cases is to create some sort of capitals.