What constitutes a financial security?

A financial security is defined as a tradable asset that holds monetary value and can be bought or sold in financial markets. This includes various instruments such as stocks, bonds, and derivatives. The key characteristic that identifies something as a financial security is its tradability and established value in the marketplace.

In the context of the other options, while real estate is indeed an asset, it is not classified as a financial security because it is typically non-tradable in the manner that stocks or bonds are. Cash, while it has value, does not constitute a financial security as it is not considered an investment vehicle. Lastly, a personal loan agreement is a private arrangement and lacks the formal structure and tradability characteristic of financial securities, as such agreements cannot be easily sold or exchanged in a financial market. Thus, the definition of financial securities is accurately embodied in the choice identifying a tradable financial asset with value.