Meaning of security

A security is a document that is an evidence of specific claims on a stream of income and/or the particular assets. Debt securities include bonds and mortgages. Ownership securities include common stock certificates and the title to marketable assets. In addition, preferred stock is a hybrid security which entitles its owner to a mixture of both ownership and creditor ship privileges.

A good security should have the following characteristics:

1. Free from encumbrances

2. Easy marketability

3. Easy storability

4. Durability

5. Free from price fluctuations

6. Easy ascertainment of value

7. Earning of income

8. Free from heavy cost of handling

9. Free from disabilities