October 5 FINMAR

FINANCIAL INSTRUMENTS (PHILIPPINE FINANCIAL SYSTEMS)

-Naka pattern sa ibang bansa ang financial system ng Philippines

(USA)

financial instrument
there must be a contract
there are atleast two parties involved

Financial assest:
-cash
-contractual right to received cash or another financial asster
from another entity (receivables)
-contractual right to exchange fiancial isntrumnets with
another entity under conditions that are potentially favorable(equity/bonds)

TYPES OF FINANCIAL INSTRUMENTS

Primary - fixed nature (deposits of cahs, debt investments,equity investments,
receivable,payables)
Derivative - future in nature - risk (acquired or transferred) e.g.
options,forwards/futures,swaps,caps and collars
Compound - e.g. convertible bonds,equity indexed notes, exchangeable debts (

BONDS
HOLDER - Investment- Asset (makakareceive ng interest)
ISSUER - may liability

STOCK CERTIFICATE
HOLDER - owner (asset) (makakareceive ng dividend)
ISSUER - equity account

RISK VS. REWARD - Any kind of investment involve a certain degree of risk
risk high - return high
RISK - capacity to pay and willingness to pay

INDIVIDUAL RISK APPETITE - One man's food is another man's poison - the same goes
for investment

INVESTMENT CAPITAL - The amount is investment capital you have can also affect your
choice of investment

TIME HORIZON - kung gaano katagal mo marereceive return(specific time)