What is the financial instruments?

Financial instruments are contracts that represent a claim to an asset or a right to receive cash flows. They can be categorized into two main types: equity instruments, such as stocks, which represent ownership in a company, and debt instruments, such as bonds, which represent borrowed funds that must be repaid with interest. Financial instruments can be traded in various markets and are essential for raising capital, managing risk, and facilitating investment. Examples include stocks, bonds, derivatives, and currencies.