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BRILLIANT’S Conceptual Framework of Finance Functions 31

to buy and sell financial instruments (tools Ûmam YZ àmá H$aZo Ho$ {bE Cn`moJ {H$`o OmVo h¢) H$mo
that are used to raise money by business). IarXZo VWm ~oMZo Ho$ {bE AmVo h¢&
(iii) Money Market: Where lending and (iii) _Zr _mH}$Q>… Ohm§ _Zr H$s b|qS>J Ûmam ~m°amoB§J H$_
borrowing of money are done for shorter g_` Ad{Y Ho$ {bE H$s OmVr h¡ VWm Omo àmW{_H$
period of time and which is primarily
covered up by the government treasury ê$n go emgZ H$s Q´>oOar EpŠQ>{dQ>r Ûmam g_m{hV H$s
activity. OmVr h¡&
3. Financial Instruments: These are the 3. \$m`Z|{e`b B§ñQ¯>_|Q²>g… `o \$m`Z|{e`b AgoQ²>g,
financial assets, securities and claims. They {gŠ`y[aQ>rO VWm Šboåg h¢Ÿ& BÝh| \$m`Z|{e`b AgoQ²>g
may be viewed as financial assets and finan- VWm \$m`Z|{e`b bm`{~{bQ>rO Ho$ ê$n _| XoIm Om gH$Vm
cial liabilities. These are the instruments h¡Ÿ& `o Eogo B§ñQ¯>_|Q²>g h¢ {OZHo$ Ûmam EH$ H§$nZr \$ÊS²>g
through which a company raises funds. àmßV H$aVr h¡Ÿ&
Classification of Financial Instruments \$m`Z|{e`b B§ñQ¯>_|Q²>g H$m dJuH$aU
(i) Classification on the basis of term (i) Ad{Y (Q>_©) Ho$ AmYma na dJuH$aU
(a) Capital market instruments: Financial in- (a) H¡${nQ>b _mH}$Q> BÝñQ¯>_|Q²>g… \$m`Z|{e`b B§ñQ¯>_|Q²>g
struments that are used for raising capital Omo H¡${nQ>b _mH}$Q> go H¡${nQ>b àmßV H$aZo Ho$ {bE
through capital market are known as capi-
Cn`moJ {H$`o OmVo h¢, do H¡${nQ>b _mH}$Q> B§ñQ¯>_|Q²>g
tal market instruments. Example: equity
H$hbmVo h¢Ÿ& CXmhaU… BpŠdQ>r eo`g©, {à\$a|g eo`g©,
shares, preference shares, warrants, deben-
tures and bonds. These securities have a dm°a§Q²>g, {S>~oÝMg© VWm ~m°ÊS²>gŸ& `o {gŠ`y[aQ>rO EH$
maturity period of more than one year. df© go A{YH$ Ad{Y H$s _oÀ`mo[aQ>r dmbr hmoVr h¢Ÿ&
(b) Money market instruments: Financial (b) _Zr _mH}$Q> B§ñQ¯>_|Q²>g… \$m`Z|{e`b B§ñQ¯>_|Q²>g EH$
instruments that are used for raising and Aënmd{Y _| _Zr _mH}$Q> go YZ àmßV H$aZo VWm
supplying money in a short period not ex- Amny{V© H$aZo Ho$ {bE Cn`moJ {H$`o OmVo h¢ VWm
tending one year through money market {OZH$s Ad{Y EH$ df© go A{YH$ Zht hmoVr h¡, `o _Zr
are called money market instruments. Ex- _mH}$Q> B§ñQ¯>_|Q²>g H$hbmVo h¢Ÿ& CXmhaU… Q´>oOar {~ëg,
ample: treasury bills, commercial paper, H$_{e©`b nong©, H$m°b _Zr, em°Q>© Zmo[Q>g _Zr,
call money, short notice money, certificate
g{Q>©{\$Ho$Q²>g Am°\$ {S>nm°{OQ²>g, H$_{e©`b {~ëg,
of deposits, commercial bills, money mar- _Zr _mH}$Q> å`wMwAb \$ÊS²>gŸ&
ket mutual funds.
(c) Hybrid instruments: Those instruments (c) hm`{~«S> B§ñQ¯>_|Q²>g… do B§ñQ¯>_|Q²>g {OZ_| B{ŠdQ>r VWm
which have features of both equity and de- {S>~oÝMg© XmoZm| Ho$ JwU hmoVo h¢, do hm`{~«S> B§ñQ¯>_|Q²>g
bentures are hybrid instruments. Ex- h¢Ÿ& CXmhaU… H$Ýd{Q>©~b {S>~oÝMg©, dm°aÝQ²>g Am{XŸ&
ample: convertible debentures, warrants,
etc.
(ii) Other types of instruments (ii) B§ñQ¯>_|Q²>g Ho$ AÝ` àH$ma
(a) Cash instruments: Financial instruments (a) H¡$e B§ñQ¯>_|Q²>g… {OZ \$m`Z|{e`b B§ñQ¯>_|Q²>g H$m _yë`
whose value is determined directly by grYo _mH}$Q> Ûmam {ZYm©[aV {H$`m OmVm h¡ do H¡$e
markets are cash instruments. B§ñQ¯>_|Q²>g h¢Ÿ&