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| What is Security?
Security could mean two things one it can be similar to collateral as in the borrower puts something up to secure the loan or contract usually it’s a house. And the other meaning stands for buying securities from companies, receiving partial ownership in that company or firm. After the purchase has been made then the customer will have future rights like voting in meetings.
For example you want to take out a loan and the creditor asks for a security because he feels that granting the loan might be too risky with out an insurance. Usually houses are put up as securities for loans and contracts. If there’s a default on the loan then the house is seized and auctioned of to cover the loan. In other terms securities are issued by firms and corporations to ensure capital. The persons who buy up these securities they receive profit from the company’s income. The security holders are part owners also and depending on the percentage what they hold they can be entitled to vote in company meetings. | | | | |
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