What assets can be used as security in finance?

A security is any financial instrument with a fungible value that investors can trade. Common securities include stocks, bonds, index and mutual funds as well as options and other derivatives that derive their value from other assets.

What is the role of security in finance?

Financial security is about having enough money to absorb financial shocks, reach your savings goals, and make choices that allow you to enjoy your life. Financial security is important because it keeps financial stress to a minimum and helps you feel in control of your future.

What are the benefits of security finance?

A security interest lowers the risk for a lender, allowing it to charge lower interest on the loan. Lower interest means that the borrower’s cost of capital will also be reduced. Securing interest on a loan lowers the risk for the lender and, in turn, allows the lender to charge lower interest, thereby lowering the cost of capital for the borrower.

How can I achieve financial security?

The first step to financial security is creating a safety net that protects you from the unknown. Unexpected things are bound to happen, whether it’s something bad like a flat tire or something good like a destination wedding. Having a built-in fund to cover these expenses helps ensure your long-term goals don’t get derailed when surprises happen.