What Is A Stock Exchange Security And What Are The Advantages Of These Securities?


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Nouman Umar answered
Stock exchange securities as the name signifies are those securities which are quoted on the stock exchange. They cover all such securities such as stock and share certificates, bonds, debentures issued by joint stock companies and other companies by public bodies and by the government. The stocks and shares of private companies which are usually not quoted on the stock exchange can also serve as security for the loan. The main advantage of stocks and shares as securities for advances are as follows:

• The are easily marketable.
• They are generally more reliable.
• The quoted shares can be easily valued.
• Most of the shares are fully negotiable.
• Realization of loan by sale of securities is comparatively easy.
• The stock exchange securities in normal time are less liable to market fluctuations than other commodities.
• Their transfer is comparatively easy. The expenses on the release of stock exchange securities are less compared to other securities such as land and building.
• The securities earn interest which reduces the burden of the loan.
• The bank can meet its timely need of money by pleading the securities with other banks.

So these are the advantages of the stock exchange securities. So this helps the people to understand better the stock exchange securities.

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