Hybrid Security

Posted in Finance, Accounting and Economics Terms, Total Reads: 1093
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Definition: Hybrid Security

A hybrid security is a security that combines two different financial instruments and generally exhibits properties of both debt and equity. It is created as a financial innovation instrument to cater to the requirements of sophisticated investors.

 

A common example of the hybrid security is a convertible bond that initially starts off as a straight bond but can be converted into shares of the issuer later.

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