Which of the Following Are Regarded as Financial Instruments

question 7

Multiple Choice

Which of the following are regarded as financial instruments:
I Deposits held by a financial institution;
II Ordinary shares;
III Raw materials inventories;
IV Property, plant and equipment.
V Accounts receivable and accounts payable.

• A) I, II, IV and V only;
• B) II, III and IV only;
• C) I, II and V only;
• D) I, IV and V only.

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Definitions:

Serial Bonds

Bonds that are issued under the same contract but mature at different times, allowing the issuer to spread the repayment over several periods.

Principal Retirement

The act of paying off the original sum of money borrowed in a loan, excluding interest payments.

Unsecured Bond

A bond not backed by collateral, relying on the issuer's creditworthiness.

Indenture

A formal legal agreement, contract, or document between two parties, especially one detailing the terms and conditions of a bond or debenture.