Types of Securities

          Money is the fundamental measure of wealth. In addition to money, an individual of a business also measures its wealth in terms of the real and financial assets or claims that it holds. Real assets include the direct ownership of land, buildings or homes, equipments, inventories, durable goods, and even precious metals. Financial assets or claims are dept instruments, equity securities, and other financial contracts that are backed by real assets. A loan to you to purchase an automobile usually provides for the lender to hold the auto title (ownership) until the loan is repaid. Long-term dept issued by a corporation may represent a claim against specific assets, such as buildings and equipment, or the general assets of the issuer. A mortgage loan to you will be backed by the house against which the loan is being made.
          Relatively few of the many types of financial assets actually require the use of secondary financial markets. Checkable deposits, such as checking accounts and share drafts, and time deposits, such as savings accounts held in depository institutions, are also examples of financial assets. In fact, all kinds of promissory notes or IOUs represent financial assets to their holders. When the public holds currency issued by the U.S government, the currency is a financial assets. At the same time, it is a financial liability to the government.