Is a stock a financial instrument?
Securities under equity-based financial instruments are stocks. Exchange-traded derivatives in this category include stock options and equity futures. The OTC derivatives are stock options and exotic derivatives.
Which item is not a financial intermediary?
Feedback: Credit unions, insurance companies, and mutual funds take money from investors and issue their own securities (e.g., checking accounts, insurance policies, and mutual fund shares). Investment bankers help firms issue new securities to the public, and are not financial intermediaries.
Which of the following financial instruments is primarily used to transfer risk?
Derivatives are used to transfer risk. 41. The price of a financial instrument rises when a specified payment is made further in the future.
Which of the following is not a financial instrument?
The following are examples of items that are not financial instruments: intangible assets, inventories, right-of-use assets, prepaid expenses, deferred revenue, warranty obligations (IAS 32. AG10-AG11), gold (IFRS 9. B. 1).
What role do financial intermediaries like banks play in facilitating transactions between untrusted parties?
Financial intermediaries serve as middlemen for financial transactions, generally between banks or funds. These intermediaries help create efficient markets and lower the cost of doing business. Intermediaries can provide leasing or factoring services, but do not accept deposits from the public.
How do financial institutions help cities towns and communities?
What is the role of public banks in communities? Every financial institution receives deposits and uses that capital to loan money to an individual, a business, or a commercial investment. This can lead to improvements in community development, affordable housing, and sometimes major corporate investments.
Which of the following best describes financial markets?
3. Which of the following statements best describes financial markets? selling financial instruments since people are earning fees for these transactions.
Which of the following is a secondary market?
The secondary market is where securities are traded after the company has sold its offering on the primary market. It is also referred to as the stock market. The New York Stock Exchange (NYSE), London Stock Exchange, and Nasdaq are secondary markets.
Which of the following financial instruments may be considered a derivative financial instrument?
(d) Futures contracts, credit indexed contracts, and interest rate swaps are all included in derivative instruments. 9.
What is the principle of accounting for a compound instrument eg an issued convertible debt instrument )?
What is the principle of accounting for a compound instrument (e.g., an issued convertible debt instrument)? (a) The issuer shall classify a compound instrument as either a liability or equity based on an evaluation of the predominant characteristics of the contractual arrangement.
Which of the following loan commitments are within the scope of IFRS 9?
The following loan commitments are within the scope of IFRS 9: Loan commitments that the entity designates as financial liabilities at fair value through profit or loss in accordance with paragraph 4.2.
What are financial services firms?
A financial services company refers to a financial company which provides economic services. This can include a range of things such as banks, credit card companies, insurance companies, accountancy companies, credit unions, stock brokerages, investment funds and consumer finance companies among others.
What is financial asset?
Financial assets refer to assets such as stocks and other financial instruments. Financial assets are can also be a source of investment to an investor. Most of the financial assets earn a return to the investor.
What do consumers need to operate effectively?
For an economy to operate effectively, consumers and businesses need a common medium of exchange and mechanisms to encourage some people to save, others to borrow and others to invest. In any modern economy, these needs are met with money, stocks and bonds.
