Marketable Security

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DEFINITION of 'Marketable Security'

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.

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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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