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Simple English definitions for legal terms
coupon security
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A quick definition of coupon security:
Definition: Coupon security is a type of collateral that is given to guarantee the repayment of a debt. It can also refer to an instrument that shows ownership or creditor rights in a company or government. Securities represent an investment in a common enterprise and can include stocks, bonds, and other financial instruments. Their value depends on the financial condition or future prospects of the entity that issued them.
A more thorough explanation:
A coupon security is a type of security, which is an instrument that shows ownership or creditor rights in a company or government. It can be a stock, bond, or other type of investment.
Securities are different from other commodities because they don't have intrinsic value on their own. Their value depends on the financial condition of the company or government that issued them, and how much other people are willing to pay for them based on their evaluation of the company's prospects.
- A stock in a company
- A bond issued by a government
- A certificate of deposit for a security
For example, if you own a stock in a company, you have a share of ownership in that company. The value of your stock depends on how well the company is doing and how much other people are willing to pay for it. If the company is doing well, your stock may increase in value, and you can sell it for a profit. If the company is not doing well, your stock may decrease in value, and you may lose money if you sell it.