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What is a key characteristic of a financial instrument?
Practice Questions
Q1
What is a key characteristic of a financial instrument?
It can be traded in financial markets
It is always backed by physical assets
It has a fixed maturity date
It cannot be used for hedging
Questions & Step-by-Step Solutions
What is a key characteristic of a financial instrument?
Steps
Concepts
Step 1: Understand what a financial instrument is. It is something that represents a monetary value.
Step 2: Recognize that financial instruments can be things like stocks, bonds, or currencies.
Step 3: Identify that a key characteristic of these instruments is that they can be bought and sold.
Step 4: Realize that being able to trade them in financial markets is what makes them valuable.
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