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LSDefine
Simple English definitions for legal terms
assessable security
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A quick definition of assessable security:
An assessable security is something that shows you have a right to something else, like a stock or bond. It doesn't have value on its own, but depends on the value of what it represents. It's like a ticket that lets you get something later, but only if the person or company that gave you the ticket is doing well.
A more thorough explanation:
An assessable security is a type of security that represents ownership in a company or government and can be used as collateral to guarantee repayment of a debt. It is a type of investment that is not directly involved in the operations of the company or government.
Examples of assessable securities include stocks, bonds, and options. Stocks represent ownership in a company, while bonds represent a loan to a company or government. Options give the holder the right to buy or sell a security at a certain price.
For example, if you buy a stock in a company, you become a part owner of that company. However, you do not have any direct control over the company's operations. If the company does well, the value of your stock may increase, and you may be able to sell it for a profit. If the company does poorly, the value of your stock may decrease, and you may lose money.
Assessable securities are important for investors because they provide a way to invest in a company or government without having to be directly involved in its operations. They also provide a way to diversify an investment portfolio and spread risk across different types of securities.