Financial Instruments: Lesson 1.4
Financial Instruments: Lesson 1.4
Financial Instruments: Lesson 1.4
Financial
Instruments
Business Finance
Accountancy, Business, and Management
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Suppose you are
lending money to
people. Would you
need proof of the
amount of money they
owe you?
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Most people would want a
real or virtual document to
serve as proof of their
transaction.
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Investors and creditors also
want the value of their assets
protected from fluctuations.
Hence, the creation of
financial instruments.
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Quick Look
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Quick Look
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Quick Look
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Quick Look
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Quick Look
Questions to Ponder
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Learning Competency
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Learning Objectives
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What instrument is the most profitable
for investment?
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Financial Instruments
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Cash Instruments
● considered as cash
instruments because they
fungible or interchangeable
constitute monetary value
with other assets of similar
● exchanged through an
value
agreement between the
parties
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Cash Instruments
Securities
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Cash Instruments
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Cash Instruments
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Cash Instruments
Securities
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Cash Instruments
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Classification of Bonds
Kinds of Bonds
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Cash Instruments
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Cash Instruments
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Cash Instruments
Cash Deposits
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Cash Instruments
Cash Loan
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BTr Website as Bond Hub
Closer
Look
The Green Land Company owns land and would like to build
townhouses in the city. The company issues bonds to the public
through the Bureau of Treasury (BTr) to fund their project rather
than make bank loans.
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BTr Website as Bond Hub
Closer
Look
The investors who visit the BTr websites can then accomplish
the BTr’s requirement to be included in the bond offerings and to
finalize the bond contract.
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Check Your Progress
Answer area
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Derivative Instruments
Derivative
Instruments
forward futures
contracts contracts options swap
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Derivative Instruments
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Derivative Instruments
Options Swap
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Derivative Instruments
Closer
Look
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A Promise to Buy in the Future
Closer
Look
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Foreign Exchange Instruments
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Categories of Forex Instruments
Foreign
Exchange
Instruments
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Foreign Exchange Instruments
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Foreign Exchange Instruments
Currency Swap
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Buying Items From Other Countries Online
Closer
Look
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Locking in the Currency Rate for a Future Purchase
Closer
Look
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Check Your Progress
2 What are the four derivatives? Why are they called derivatives?
Answer area
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Solutions in Building and Improving Homes
Case S
tudy
Case S
tudy
Case S
tudy
ReferenBea Parungo, Jitendra Balani, and Naeem Razwani, “Improving access to Housing Microfinance Solutions Among Low-
income Households in the Philippines,” FinDev Gateway (Terwilliger Center for Innovation in Shelter, October 2020),
https://www.findevgateway.org/case-study/2020/10/improving-accsess-housing-microfinance-solutions-among-low-income-
households, last accessed on November 6, 2021. ce here and attach the link :) 51
Keep in Mind
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Keep in Mind
Keep in Mind
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Keep in Mind
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Try This
Fill in the missing words to make the statement correct.
Answer area
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Try This
Fill in the missing words to make the statement correct.
Answer area
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Try This
Fill in the missing words to make the statement correct.
Answer area
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Try This
Fill in the missing words to make the statement correct.
Answer area
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Try This
Fill in the missing words to make the statement correct.
5. F i n a n c i a l i n s t r u m e n t s a r e t r a d e d i n t h e
_____________________ either directly or through financial
intermediaries.
Answer area
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Practice Your Skills
Identify the financial instrument used in each scenario.
Answer area
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Practice Your Skills
Identify the financial instrument used in each scenario.
2. Jen uses her credit card in almost all purchases she makes;
she finds this more convenient than withdrawing money and
paying in cash. She also uses her monthly credit card bill to
track her expenses. What financial instrument is Jen using?
Answer area
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Challenge Yourself
Write your answer inside the box.
Answer area
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Challenge Yourself
Write your answer inside the box.
Answer area
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Photo Credit
Slides 3 and 27: Marketing Dollar Business, by Genius Maker is free to use under Pixabay license via Pixabay.
Slide 22: Stocks and Bonds, by Alan Levine is free for commercial use via pxhere.
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Bibliography
Development Bank of the Philippines. “Government Securities”, DBP, (BSP). Accessed November 1, 2021.
https://www.dbp.ph/corporate-and-institutional-banking/treasury-products/government-securities/.
Dungo, Fehl. “Best Stock Brokers in the Philippines”. Accessed on October 27, 2021. https://philpad.com/best-stock-
brokers-in-the-philippines/.
O’shea, Arielle. “What are Stocks and How Do They Work?”. NerdWallet. Accessed October 29, 2021.
https://www.nerdwallet.com/article/investing/what-are-stocks-how-they-work.
Parameswaran, Sunil. Fundamentals of Financial Instruments (1st ed.) New York: Wiley, 2011.
PESOLAB. “Beginner’s Guide Philippine Retail Treasury Bonds”. Accessed on October 29,
2021.https://pesolab.com/guide-to-philippine-retail-treasury-bond/.
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