Question

List of instruments of international finance

Answer 1

Answer:

Financial instruments can be either cash instruments or derivative instruments:

Cash instruments

Cash instruments are those whose value is determined directly by the markets. They can be securities, which are readily transferable and loans and deposits, where both borrower and lender have to agree on a transfer.

Derivative instruments

Derivative instruments are those which derive their value from the value and characteristics of one or more underlying entities such as an asset, index, or interest rate. They can be exchange-traded derivatives and over-the-counter (OTC) derivatives.