combination security

Combination Security

Any complex security that includes features of two or more basic securities. One of the most common combination securities is a convertible bond, which is a bond that may be exchanged for common stock. In other words, a convertible bond combines features of bonds (with a fixed return and repayment at maturity) with features of stocks (with equity in the issuing company and the possibility of a high return).

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combination security

A security that combines the attributes of two or more individual securities. An example of a combination security is a convertible bond that is part debt and part common stock.

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.