Needed a Document for FINANCIAL INSTRUMENTS? Related: Indian Financial System - Notes and Videos?

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Needed a Document for FINANCIAL INSTRUMENTS?

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Needed a Document for FINANCIAL INSTRUMENTS? Related: Indian Financi...

A financial instrument is a monetary contract between parties. We can create, trade, or modify them. We can also settle them. A financial instrument may be evidence of ownership of part of something, as in stocks and shares. Bonds, which are contractual rights to receive cash, are financial instruments.

Financial Instrument

A financial instrument can represent ownership of something, a loan that an investor made to the asset’s owner, or a foreign currency.

Financial instrument – cash or derivative

There are two main types of financial instruments, derivative or cash instruments.

Derivative instruments

Derivative instruments are instruments whose worth we derive from the value and characteristics of at least one underlying entity. Assets, interest rates, or indexes, for example, are underlying entities.

Cash instruments

Cash instruments are instruments that the markets value directly.

Securities, which are readily transferable, for example, are cash instruments.

Deposits and loans, where both lender and borrower must agree on a transfer, are also cash instruments.

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Needed a Document for FINANCIAL INSTRUMENTS? Related: Indian Financial System - Notes & Videos? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Needed a Document for FINANCIAL INSTRUMENTS? Related: Indian Financial System - Notes & Videos? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Needed a Document for FINANCIAL INSTRUMENTS? Related: Indian Financial System - Notes & Videos?.

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