An Equity Security is an investment in the equity or ownership side of a business. It is typically a variable investment, meaning an investor may face a loss of principal. In the event of bankruptcy, Equity Securities are given lower priority than Debt Securities.
The investor in an Equity Security is normally interested more in the growth of capital than in a stream of income, like dividends.
Equity Security prices are sensitive to the business cycle and the forward-looking prospects of the firm.
Synonym: stock, equities
Doc: Think of an
like the ownership of a home.
Lia: So brokerage firms offering margin are like mortgage lenders?
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False, unless they invested with margin.
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