Lesson 2 : Financial Instruments, Institutions,And
Markets
First Semester — 1st Quarter
Business Environment 3. Loan
- classified as either macro or micro Asset - lender or creditor
environment Liability - borrower or debtor
- divided into international, national, 4. Bond
regional, and local levels Asset - holder or investor
Financial System - Is principally responsible liability - issuing company
for the flow of money or funds from lender to 5. Stock
the borrower. The financial system controls, Asset - investor or shareholder
regulates, and facilitates the saving, Equity - issuing company
borrowing, lending, and investing activities
happening among the different players BONDS
existing in the system Bond - is a financial instrument that
In the Philippine financial system,the represents a contractual debt of the party
government plays an active role in the flow of issuing the bond. The issuing party may
money in the economy through the Bangko either be a private business entity or a
Sentral ng Pilipinas (BSP), they regulate the government. This type of financial
operations of financial institutions and instrument is evidenced by a certificate
financial intermediaries called bond indenture
The most common types of bonds are as follows:
Financial Instruments 1. term bond
- means by which financial institutions 2. serial bond
and financial markets carry out their 3. secured bond
respective activities 4. debenture bond
- refers to a contract that gives rise to 5. convertible bond
the creation of a financial asset of one 6. callable bond
entity and at the same time the Term Bond - It is a bond that has a single
creation of a financial liability or an maturity date. The bond can be a single loan
equity instrument in another entity bond, or can be composed of several bonds
The most common forms of financial with the same maturity date
instruments are: Serial Bond - kind of bond that has series or
1. Cash several maturity dates instead of a single
Asset - holder maturity date
Liability - government Secured Bond - type of bond that is secured
2. Check by the issuing company. The security is
Asset - payee issued in the form of real property which
Liability - drawer or issuer serves as collateral in the event of default on
the part of the bond issuer
Markets
First Semester — 1st Quarter
Business Environment 3. Loan
- classified as either macro or micro Asset - lender or creditor
environment Liability - borrower or debtor
- divided into international, national, 4. Bond
regional, and local levels Asset - holder or investor
Financial System - Is principally responsible liability - issuing company
for the flow of money or funds from lender to 5. Stock
the borrower. The financial system controls, Asset - investor or shareholder
regulates, and facilitates the saving, Equity - issuing company
borrowing, lending, and investing activities
happening among the different players BONDS
existing in the system Bond - is a financial instrument that
In the Philippine financial system,the represents a contractual debt of the party
government plays an active role in the flow of issuing the bond. The issuing party may
money in the economy through the Bangko either be a private business entity or a
Sentral ng Pilipinas (BSP), they regulate the government. This type of financial
operations of financial institutions and instrument is evidenced by a certificate
financial intermediaries called bond indenture
The most common types of bonds are as follows:
Financial Instruments 1. term bond
- means by which financial institutions 2. serial bond
and financial markets carry out their 3. secured bond
respective activities 4. debenture bond
- refers to a contract that gives rise to 5. convertible bond
the creation of a financial asset of one 6. callable bond
entity and at the same time the Term Bond - It is a bond that has a single
creation of a financial liability or an maturity date. The bond can be a single loan
equity instrument in another entity bond, or can be composed of several bonds
The most common forms of financial with the same maturity date
instruments are: Serial Bond - kind of bond that has series or
1. Cash several maturity dates instead of a single
Asset - holder maturity date
Liability - government Secured Bond - type of bond that is secured
2. Check by the issuing company. The security is
Asset - payee issued in the form of real property which
Liability - drawer or issuer serves as collateral in the event of default on
the part of the bond issuer
