Marketable Security

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What is 'Marketable Security'

A marketable security is any equity or debt instrument that it readily salable and can be converted into cash, or exchanged with ease. Stocks, bonds, short-term commercial paper and certificates of deposit are all considered marketable securities because there is a public demand for them and because they can be readily converted into cash.

BREAKING DOWN 'Marketable Security'

Whereas shares in private corporations are illiquid, marketable securities can be converted to cash with great ease. Shares of IBM and government bonds are excellent examples of marketable securities. Marketable securities provide investors with the liquidity of cash and the ability to earn a return when the assets are not being used.

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RELATED FAQS
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    First, let's define convertible bonds. A unique combination of debt and equity, they provide investors with the chance to ... Read Answer >>
  2. What are the characteristics of a marketable security?

    Find out what it takes for a financial asset to be considered a marketable security, including its liquidity, intent of use ... Read Answer >>
  3. Does working capital include marketable securities?

    Learn how marketable securities such as Treasury bills (T-bills) and commercial papers are part of current assets and the ... Read Answer >>
  4. What does it mean when an investor moves a bond to equity?

  5. How is convertible bond valuation different than traditional bond valuation?

    Read about bond valuation, particularly the differences between how a traditional bond is valued and how a convertible bond ... Read Answer >>
  6. What is a convertible bond?

    A convertible bond is a bond issued by a corporation that, unlike a regular bond, gives the bondholder the option to trade ... Read Answer >>
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