Prelims 2024 · Economy · Question 84
Consider the following: 1. Exchange-Traded Funds (ETF) 2. Motor vehicles 3. Currency swap. Which of the above is/are considered financial instruments?
Answer
1 and 3 only
1. Exchange-Traded Funds (ETF): Correct. ETFs are market-traded investment products representing a basket of assets; they are recognized financial instruments/securities.
2. Motor vehicles: Incorrect. Motor vehicles are physical real assets/consumer goods, not financial instruments.
3. Currency swap: Correct. A currency swap is a derivative contract involving exchange of cash flows in different currencies, so it is a financial instrument.
Hence, 1 and 3 only are financial instruments.