A ‘financial instrument’ is a broad term used to describe any type of contract or security representing a financial right or participation in a cash flow, economic entity or asset. Financial instruments are used as vehicles to transfer and manage financial risks, to invest, to obtain financing or to perform other financial transactions.
Examples of financial instruments are shares, bonds, mutual funds and derivatives.
Purchasing power refers to the quantity and quality of goods and services that can be acquired with a given amount of money.
Bonds are debt securities issued by governments or institutions to raise funds for various financial purposes.
A Deficit in economics signifies a situation where expenses exceed revenues, resulting in a state of financial loss.
Default occurs when an entity fails to meet its debt obligations, potentially leading to bankruptcy or other financial repercussions.
The Consumer Price Index (CPI) is the principal measure used to track inflation, reflecting the average price change over time.
Capital refers to funds or assets for investment or economic activities crucial for business growth and development.
Capital gain is the profit earned from selling an asset at a higher price than its purchase cost, commonly realised in stock markets.
Commercial Banks cater to individuals and small businesses, offering deposit accounts, loans, and other traditional banking services.
The Central Bank sits atop the banking hierarchy, working with the government to regulate monetary policy and currency issuance.
Stocks are financial instruments representing ownership shares in a company, entitling holders to a portion of the corporate profits.
