Business Finance 12, Lesson 1.4 : Financial Instruments

an asset, that holds capital and can be created, liquidated, revised, and traded in the market

(a)  

instruments whose value is directly established and perceived by the market

(a)  

2 kinds of Cash Instruments

(a)  

an agreement between parties

an asset to one party and a liability to the other

(a)  

Types of Financial Instruments

fungible or interchangeable with other assets of similar value

(a)  

• considered as cash instruments because they constitute monetary value

• exchanged through an agreement between the parties

(a)  

• entitle the holder to have a part ownership of a publicly listed company

• offered through an IPO

(a)  

• offered by companies and governments who need funds

• entitles the holder to get their money back with interest

(a)  

Kinds of Bonds