A financial instrument is a contract that represents a monetary asset or liability and can be traded or settled in the financial markets. They are essential for facilitating the flow of capital and risk across the economy, enabling investment, hedging, and speculation activities.

Financial Instrument

financial instrument

contract

monetary asset

Monetary liability

Financial markets are platforms where individuals and institutions can trade financial securities, commodities, and other fungible items at prices that reflect supply and demand. They play a crucial role in the economy by facilitating liquidity, price discovery, and the efficient allocation of resources.

financial markets

flow of capital

Risk management involves identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events. It is essential for ensuring that an organization can achieve its objectives while safeguarding its assets and reputation against potential threats.

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