A pure security or primitive security or Arrow-Debreu security is a security that pays 1 currency unit at the end of the period if one particular state of nature is realized and pays nothing if any other state is realized. Market securities can be thought of as portfolios of pure securities, which is a useful abstraction facilitating analysis in many economic contexts.
The concept of the pure securities allows the logical decomposition of the market securities into portfolios of pure securities. Thus every market security may be considered a combination of various pure securities.
Famous quotes containing the words pure and/or security:
“The New Testament is remarkable for its pure morality; the best of the Hindoo Scripture, for its pure intellectuality. The reader is nowhere raised into and sustained in a higher, purer, or rarer region of thought than in the Bhagvat-Geeta.... It is unquestionably one of the noblest and most sacred scriptures which have come down to us.”
—Henry David Thoreau (1817–1862)
“A well-regulated militia being necessary to the security of a free State, the right of the people to keep and bear arms shall not be infringed.”
—U.S. Constitution, Second Amendment.