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 finite is annihilated in the presence of the infinite, and becomes a pure nothing. So our spirit before God, so our justice before divine justice.”
—Blaise Pascal (1623–1662)
“...I lost myself in my work and never felt that marriage would give me the security I wanted. I thought that through the trade union movement we working women could get better conditions and security of mind.”
—Mary Anderson (1872–1964)