A financial asset is considered a security if
A)the owner of the security receives dividends and realizes a capital gain when the asset is sold.
B)it can be sold in a secondary market.
C)its value increases after it is sold in a primary market.
D)its value is secure; that is,the owner will not suffer a financial loss when the asset is sold.

Question

Quizplus · Accepted Answer

A financial asset is considered a security if it can be traded in a secondary market. A security represents ownership in a publicly-traded company or a debt that has been issued by a company or government, and it can be bought or sold in a secondary market. While securities may provide dividends or capital gains, these are not the defining characteristics of a security. The security's ability to be traded in a secondary market is the key factor.

A Financial Asset Is Considered a Security If