Revolutionary Financial Instruments – Bonds, Stocks & Derivatives
Financial instruments are tradeable assets. Most financial instruments enable the efficient flow and transfer of capital across the globe’s investors.
In addition, the role of financial instruments is crucial in shaping economics by:
- Growing Business: financial instruments fund projects and help businesses expand
- Protecting wealth: Protecting against risk to keep your wealth safe
- Invest and earn: Financial instruments help you invest and earn your wealth
- Worldwide trading: This is due to financial instruments supporting buying and selling.
- Controlling money: Governments use them to control how much money is around.
- Innovate Finance: financial instruments are always on the drive to innovate new ideas and ways to manage wealth
Purpose and Function of each financial instrument
- Bonds
- A fixed-income instrument that represents a load made by an investor to a borrower (typically corporate or government)
- Stocks
- A security that represents ownership of a fraction of the issuing corporation.
- Derivatives
- Distribution of a company’s earnings to its shareholders is determined by the company’s board of directors.
Source: investopedia.com