gs1medium
Consider the following:
- 1.Exchange-Traded Funds (ETF)
- 2.Motor vehicles
- 3.Currency swap
Which of the above is/are considered financial instruments?
- A.1 only
- B.2 and 3 only
- C.1, 2 and 3
- D.1 and 3 only
▶ Answer & Explanation
Correct answer: D. 1 and 3 only
Financial instruments are monetary contracts between parties. Exchange-Traded Funds (ETFs) represent a basket of securities and are traded on exchanges, making them financial instruments. Currency swaps involve exchanging principal and interest in different currencies, also fitting the definition of a financial instrument. Motor vehicles, however, are tangible physical assets, not financial contracts.
Source: UPSC gs1 2024