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  • Bfi Actvty 4

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    Bhebz Erin Mae
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    Financial instruments are tradable assets or contracts that represent financial value. They include stocks, bonds, currencies, and derivatives. Derivatives derive their value from underlying assets and include futures, options, and swaps. Financial instruments play an important role in capital allocation, risk management, and investment strategies in global financial markets.

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    Financial instruments are tradable assets or contracts that represent financial value. They include stocks, bonds, currencies, and derivatives. Derivatives derive their value from underlying assets and include futures, options, and swaps. Financial instruments play an important role in capital allocation, risk management, and investment strategies in global financial markets.

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    3 views1 page

    Bfi Actvty 4

    Uploaded by

    Bhebz Erin Mae
    Financial instruments are tradable assets or contracts that represent financial value. They include stocks, bonds, currencies, and derivatives. Derivatives derive their value from underlying assets and include futures, options, and swaps. Financial instruments play an important role in capital allocation, risk management, and investment strategies in global financial markets.

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    of 1

    Erin Mae A.

    Ricalde
    BSBA FM2 – G2

    Review Questions – Page 57

    Questions:

    1. Define Financial Instrument.

    A financial instrument is a term used in finance to describe any tradable asset or contract that
    represents a financial value. These instruments are used for various purposes in the financial
    markets, including investment, hedging, and speculation. Financial instruments play a crucial role in
    the global financial system by facilitating capital allocation, risk management, and investment
    strategies. They are bought and sold in financial markets, allowing investors and institutions to
    manage their financial assets and liabilities efficiently. The value and risk associated with financial
    instruments can vary widely depending on the specific type and characteristics of the instrument.

    2. Give examples of primary financial instruments.


    3. Explain the nature of a derivative.
    4.

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