Legal Definitions - government security

Definition: Government security refers to a type of investment that is issued by the government to raise money. It is a way for the government to borrow money from individuals or institutions, and it is considered a safe investment because it is backed by the government.

Example: One example of a government security is a Treasury bond. When you buy a Treasury bond, you are essentially loaning money to the government. In return, the government promises to pay you back with interest after a certain period of time.

Explanation: The example illustrates the definition by showing how a government security works in practice. When you invest in a Treasury bond, you are essentially trusting the government to pay you back with interest. Because the government is considered a safe and reliable borrower, investing in government securities is generally considered a low-risk investment.