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Simple English definitions for legal terms
marginable security
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A quick definition of marginable security:
A marginable security is something that you can use as collateral to guarantee that you will pay back money that you borrow. It can be something like a stock or a bond that shows you have a right to something else. It's important to remember that the value of a marginable security depends on the financial condition of the company that issued it.
A more thorough explanation:
A marginable security is a type of collateral that can be used to guarantee the repayment of a loan. It is a financial instrument that represents ownership in a company or government entity, such as a stock or bond.
For example, if you want to borrow money from a bank, you can offer your marginable securities as collateral. If you fail to repay the loan, the bank can sell your securities to recover the money it lent you.
Other examples of marginable securities include treasury bills, corporate bonds, and mutual funds. These securities can be bought and sold on the stock market, and their value can fluctuate based on various factors, such as the financial health of the issuing company or changes in interest rates.
Overall, marginable securities are an important tool for investors and lenders alike, as they provide a way to manage risk and ensure the repayment of loans.