Financial Instrument

Financial Instrument - A financial instrument is a virtual or real document, which represents a legally binding agreement involving some monetary value. Financial instruments in today?s financial marketplace may be generally classified as equity based to represent the ownership of an asset, or debt based to represent a loan made by an owner of an asset or an investor. Yet, foreign exchange instruments are again another unique example of an instrument, which exists on today?s stock exchanges and there are different classifications, or subcategories, for each type that exits such as common share equity, or preferred share equity, etc.