Business Finance

“Financial Instruments”
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Guess the word/s by

arranging the scrambled
letters to form the correct
word or words.

Clue = Financial Instruments

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1. SNDBO

Answer = Bonds
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2. CSCHKE

Answer = Checks
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3. TOMRGAGES

Answer = Mortgages
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4. ALLC YONME

Answer = Call money

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5. YEQTUI KOTSC

Answer = Equity Stock

 Financial Instruments

Financial instruments - are

assets that can be traded. They can
also be seen as packages of capital
that may be traded. Most types of
financial instruments provide an
efficient flow and transfer of capital
all throughout the world's investors.
 Financial Instruments

A document (such as a check, draft,

bond, share, bill of exchange, futures
or options contract) that has a
monetary value or represents a
legally enforceable (binding)
agreement between two or more
parties regarding a right to payment
of money.
 CHECK

A check is a written, dated and signed

instrument that contains an unconditional order
from the drawer that directs a bank to pay a
definite sum of money to a payee.
 BONDS

A bond is a debt investment in which an

investor loans money to an entity (typically
corporate or governmental) which borrows
the funds for a defined period of time at a
variable or fixed interest rate. Bonds are
used by companies, municipalities, states
and sovereign governments to raise
money and finance a variety of projects
and activities.
BONDS
CERTIFICATE OF DEPOSIT

A certificate of deposit (CD) is a

savings certificate with a fixed
maturity date, specified fixed interest
rate and can be issued in any
denomination aside from minimum
investment requirements. A CD
restricts access to the funds until the
maturity date of the investment.
CERTIFICATE OF DEPOSIT
 MORTGAGES

Mortgages are legal agreements by

which a bank or other creditor lends
money at interest in exchange for
taking title of the debtor's property,
with the condition that the
conveyance of title becomes void
upon the payment of the debt.
MORTGAGES
 T-BILLS (Treasury Bills)

A Treasury bill (T-Bill) – is a

short-dated government
security, yielding no interest but
issued at a discount on its
redemption price with a maturity
of less than one year, sold in
denominations.
T-BILLS (Treasury Bills)
 Call Money

Call Money are money loaned

by a bank or other institution
which is repayable on demand,
and money at short time notice
is repayable within 14 days of
serving notice.
 Equity Stock

The Stock (capital stock) of a

corporation – is constituted of
the equity stock of its owners. A
single share of the stock
represents fractional ownership
of the corporation in proportion
to the total number of shares.
Equity Stock