Financial Instruments Quiz: Test Your Knowledge of Contracts

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Questions and Answers

What are financial instruments?

Physical goods exchanged between parties
Insurance policies between parties
Legal documents between parties
Monetary contracts between parties (correct)

What are the categories of financial instruments?

Cash and derivative
Equity-based and debt-based (correct)
Foreign exchange and debt-based
Short-term and long-term

What is the definition of a financial instrument according to IAS 32 and 39?

Any monetary transaction between parties
Any ownership interest in an entity
Any contractual right to receive or deliver goods
Any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity (correct)

What are the types of financial instruments?

Cash and derivative (C) Signup and view all the answers

What are examples of debt-based financial instruments?

Bonds and loans (C) Signup and view all the answers

What are examples of equity-based financial instruments?

Shares and stocks (B) Signup and view all the answers

What is the difference between short-term and long-term debt-based financial instruments?

The length of time until the instrument matures (A) Signup and view all the answers

What category do foreign exchange instruments and transactions belong to?

Neither debt- nor equity-based (D) Signup and view all the answers

How is the gain or loss on a financial instrument measured?

The difference between the fair value of the financial instrument at the end of the reporting period and the fair value at the beginning of the reporting period (B) Signup and view all the answers

Flashcards

Financial Instruments

Monetary contracts between parties.

Categories of Financial Instruments

Equity-based and debt-based categories exist.