Securities

Securities. This is the generic term for any financial instrument traded on the StockExchange.

In common usage in the U.K., stocks are fixed rate bonds. But, the American definition has gained currency and today people understand 'securities' to refer to shares or bonds.

Taking the traditional definition, stockholders are lenders and are accounted among the company's creditors. Interest on stocks must be paid ahead of any dividend to shareholders.

Share or equity capital is money permanently supplied in exchange for a stake in the ownership of the business.

See Also: Online share dealing service Stockmarket Centre

Last Updated: March 2008 © Moneyextra.com

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