What is Equity?
An equity in the financial sector has varying definitions and the term is used differently in different sectors. An equity can represent a stock that represents ownership that a shareholder holds, the amount of funds contributed by a shareholder in a balance sheet or the value of a margin account (excluding borrowed sum from brokerages). In real estate, it is the difference of the current value of the property and the amount the homeowner owes in mortgage payments. An equity in this case, would be the return that the owner receives after selling said property and paying off all the remaining mortgage . In general, equities can be equated parallel with assets. However it is important to note that equities are not always liquid assets.