what is a security?
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Answer / anandsurya
Securities are the tradable interesting financial values
that are represented by the certificates these securities
are generally known as futures, options, shares ,bonds
these are commonly known as
Marketable and Non marketable securities
Marketable securities : Which are easily traded in the
market
Eg:Shares,Bonds,Mf etc....
Nonmarketable securities : these are generally known as
Post office bonds and some other govt securities
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Answer / nilesh
security is nothing but an investment option where in you
can invest your money.
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Answer / chandu_c4u
An instrument representing ownership (stocks), a debt
agreement (bonds), or the rights to ownership (derivatives)
or
A security is essentially a contract that can be assigned a
value and traded.
Examples of a security include a note, stock, preferred
share, bond, debenture, option, future, swap, right,
warrant, or virtually any other financial asset.
other information:
Types of securities include notes, stocks, treasury stocks,
bonds, debentures, certificates of interest or
participation in profit-sharing agreements, collateral-
trust certificates, preorganization certificates or
subscriptions, transferable shares, investment contracts,
voting-trust certificates, certificates of deposit for a
security, and a fractional undivided interest in gas, oil,
or other mineral rights. Under certain circumstances,
interests in oil- and gas-drilling programs, interests in
partnerships, real estate condominiums and cooperatives,
and farm animals and land also have been found to be
securities. Certain types of notes, such as a note secured
by a home mortgage or a note secured by accounts receivable
or other business assets, are not securities.
Securities are documents that merely represent an interest
or a right in something else; they are not consumed or used
in the same way as traditional consumer goods. Government
regulation of consumer goods attempts to protect consumers
from dangerous articles, misleading advertising, or illegal
pricing practices. Securities laws, on the other hand,
attempt to ensure that investors have an informed, accurate
idea of the type of interest they are purchasing and its
value.
Both federal and state laws regulate securities. Before
1929 companies could issue stock at will. Bogus
corporations sold worthless stock; other companies issued
and sold large amounts of stock without considering the
effect of unlimited issues on shareholders' interests, the
value of the stock, and ultimately the U.S. economy.
Federal securities law consists of a handful of laws passed
between 1933 and 1940, as well as legislation enacted in
1970. The federal laws stem from Congress's power to
regulate interstate commerce. Therefore the laws are
generally limited to transactions involving transportation
or communication using interstate commerce or the mail.
Federal laws are generally administered by the Securities
and Exchange Commission (SEC), established by the
Securities Exchange Act of 1934 (15 U.S.C.A. ยง 78a et
seq.). Securities regulation focuses mainly on the market
for common stocks.
Securities are traded on markets. Some, but not all,
markets have a physical location. The essence of a
securities market is its formal or informal communications
systems whereby buyers and sellers make their interests
known and execute transactions. These trading markets are
susceptible to manipulative and deceptive practices, such
as manipulation of prices or "insider trading," that is,
gaining an advantage on the basis of nonpublic information.
To prevent such fraudulent practices, all securities laws
contain general antifraud provisions.
Exchange markets, of which the New York Stock Exchange is
the largest, have traditionally operated in a rigid manner
by carefully delineating the numbers and qualifications of
members and the specific functions members may perform.
Conversely, over-the-counter markets (OTC) are less
structured and typically do not have a physical location.
Based upon dollar volume, the bond market is the largest.
Bonds are the debt instruments issued by federal, state,
and local government, as well as corporations. The bond
market attracts mainly professional and institutional
investors, rather than the general public. In addition,
many of these obligations are exempt from direct regulatory
provisions of the federal securities laws and consequently
usually receive little attention from SEC regulators.
However, in the mid-1980s, a debacle occurred in the junk
bond market, which included insider trading charges. (Junk
bonds are highly risky bonds with a high yield.) The
scandal, which involved the investment firm of Drexel
Burnham Lambert Inc. and trader Michael R. Milken,
attracted much attention and a flurry of SEC enforcement
activity.
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