Economics SSS 1 Third Term

WEEK 9      

Meaning of instruments of business finance

Performance Objectives

Student should be able to:

1. Identify and explain the instruments of business finance.

Content                                                                               

Meaning of instruments of business finance

A Financial Instrument is usually classed as a document (although they may come in other formats, such as verbal agreements) that has a direct monetary value or the power to create monetary value at a later date, through a contract that agrees on the payment of money to another party. Documents like cheques, bonds and shares are not a form of currency, but they do have a monetary value and are therefore financial instruments, or representations of worth.

More specifically 'Financing Instruments' are documents such as share certificates, promissory notes, or bonds that are used to obtain financing for a business or company. In other words, their creation.... View More