Financial instruments and its types and various finacial instruments
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Financial instruments refer to any type of assets that can be traded. These assets include cash, stocks, bonds, shares etc.
There are 2 types of financial instruments:
1. cash instruments :The value of these instruments are influenced and determined by the markets. Easily transferable securities are an example. Cash instruments also include deposits and loans agreed upon by borrowers and lenders.
2. derivative instruments: The value of these instruments is derived from the value of one or more underlying, that can be the following; commodities, precious metals, currency, bonds, stocks etc.
Various financial instruments include:
-Compound bonds
-simple bonds
-convertible bonds
-equity loans
-profit participative bonds
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