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1.1-Financial Assets:
Money at hand, or easily accessible, in the form of cash deposits, checks, loans, accounts
receivable, and marketable securities (bonds, notes, shares) and receivables.
An asset that derives value because of a contractual claim. Stocks, bonds, bank deposits, and
the like are all examples of financial assets. Unlike land and property--which are tangible,
physical assets--financial assets do not necessarily have physical worth.
A financial asset is an intangible representation of the monetary value of a physical item. It
obtains its monetary value from a contractual agreement of what it represents. While a real asset,
such as land, has physical value, a financial asset is a document that has no fundamental value in
of itself until it is converted to cash. Common types of financial assets include certificates,
bonds, stocks, and bank deposits. While Real assets refer to things such as gold, silver, precious
metal or land. Financial assets, on the other hand, refer to money or shares of a stock or bond.
The items in the first category considered real assets are physical and identifiable. They
can be held in one's hand and have a concrete value and inherent worth.
According to the International Financial Reporting Standards (IFRS), a financial asset can be:
Financial assets "held for trading" i.e., which were acquired or incurred principally for the
purpose of selling, or are part of a portfolio with evidence of short-term profit-taking, or
are derivatives are measured at fair value through profit or loss.
Financial assets with fixed or with determinable payments and fixed maturity which the
company has to be willing and able to hold till maturity are classified as "held-to-maturity"
investments. Held-to-maturity investments are either measured at fair value through profit or
loss by designation, or determined to be financial
assets available for sale by designation.
Financial assets with fixed or determinable
payments which are not listed in an active market
M.Azmat Awan MA Eco, MBA Banking & Finance, MS Islamic Banking & Finance CP2000 SIALKOT
MONEY & CAPITAL MARKETS (8526)
are considered to be "loans and receivables". Loans and receivables are also either measured
at fair value through profit or loss by designation or determined to be financial assets
available for sale by designation.
All other financial assets are categorized as financial assets "available for sale" and are
measured at fair value through profit or loss by designation
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1.2- Equity Market
The market in which shares are issued and traded, either through exchanges or over-the-counter
markets. Also known as the stock market, it is one of the most vital areas of a market
economy because it gives companies access to capital and investors a slice of ownership in a
company with the potential to realize gains based on its future performance.
Equity markets are the meeting point for buyers and sellers of stocks. The securities traded in the
equity market can be either public stocks, which are those listed on the stock exchange, or
privately traded stocks. Often, private stocks are traded through dealers, which is the definition
of an over-the-counter market.
M.Azmat Awan MA Eco, MBA Banking & Finance, MS Islamic Banking & Finance CP2000 SIALKOT
MONEY & CAPITAL MARKETS (8526)
$1.490 trillion in spot transactions
$475 billion in outright forwards
$1.765 trillion in foreign exchange swaps
$43 billion currency swaps
$207 billion in options and other products Page | 3
M.Azmat Awan MA Eco, MBA Banking & Finance, MS Islamic Banking & Finance CP2000 SIALKOT
MONEY & CAPITAL MARKETS (8526)
organization. Financial regulation has also influenced the structure of banking sectors, by
decreasing borrowing costs and increasing the variety of financial products available.
The objectives of financial regulators are usually:
M.Azmat Awan MA Eco, MBA Banking & Finance, MS Islamic Banking & Finance CP2000 SIALKOT