EQUITY

  1. Stock or other security denoting an ownership interest.
  2. On a firm’s balance sheet, the amount of money the owners or shareholders contributed plus the remaining earnings or losses. Also called shareholders’ equity.
  3. In margin trading, securities’ value in a margin account less the amount borrowed from the brokerage firm.
  4. In real estate, difference between the property’s current market value and debt owed on the mortgage. It refers to the amount the owner would receive upon selling the property and paying the mortgage.
  5. In investment strategies, equity (stock) is one of the primary asset classes while the other two classes are fixed-income (bonds) and cash/cash-equivalents. Equity is used in asset allocation planning to determine the desire risk and return profile for an investor’s portfolio.