Describe each type of Marketable Securities.
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Let's look at what exactly are marketable securities and I will then discuss the types of securities.
What are Marketable Securities? Basically, it's a temporary form of investment that companies make. These can be quickly converted into cash with small amounts of reasonable fees and generally have short term maturities. An organization might invest in marketable securities as a way to maintain cash for unexpected events. Marketable securities are traded in high volumes and are therefore liquid in nature; the effect of price of these securities is irrespective of the rate at which these securities are bought or sold. Some examples of marketable securities that you might be familiar with include Treasury bills, money market instruments, and commercial paper.
Types of Marketable Securities:
A stock is a share an individual or a company purchases in the ownership of a company. "Stock represents a claim on the company's assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater. Whether you say shares, equity, or stock, it all means the same thing." (Investopedia, 2011). Stocks are considered to be marketable securities because there is a public demand for them and because they can be readily converted into cash. An investment in equity is an investment ...
The solution discusses the types of marketable securities. Among the ones discussed are stocks, bonds, commodities, Treasury Securities, Derivatives. A short explanation is provided for each. There are four references provided formatte using APA styling.