^{PDFprof.com Search Engine}

CHAPTER 5 Financial instruments financial markets and

What are financial instruments and financial markets?
A financial instrument is effectively a monetary contract (real or virtual) that confers a right or claim against some counterparty in the form of a payment (checks, bearer instruments), equity ownership or dividends (stocks), debt (bonds, loans, deposit accounts), currency (forex), or derivatives (futures, forwards,
What are the 3 main categories of financial instruments?
Basic examples of financial instruments are cheques, bonds, securities.
There are typically three types of financial instruments: cash instruments, derivative instruments, and foreign exchange instruments.
What are 3 functions of financial instruments?
Three functions:
Financial instruments act as a means of payment (like money).Financial instruments act as stores of value (like money).Financial instruments allow for the transfer of risk (unlike money).
The 5 roles of financial markets are ensuring a low cost of transactions and information, ensuring liquidity by providing a mechanism for an investor to sell the financial assets, providing security to dealings in financial assets, and providing facilities for interaction between the investors and the borrowers.

What are financial instruments and financial markets?