Correct Option (D)
Exchange-Traded Funds (ETFs) and Currency Swaps are considered financial instruments.
- Exchange-Traded Funds (ETFs): These are marketable securities that track an index, commodity, bond, or basket of assets. ETFs are traded on stock exchanges, similar to individual stocks. They represent a claim on underlying financial assets and are thus classified as financial instruments.
- Currency Swaps: These are derivative financial instruments where two parties agree to exchange principal and/or interest payments in different currencies. They are primarily used by institutions for hedging currency risk or managing debt, representing contractual financial obligations.
Incorrect Options:
- Motor vehicles: These are tangible, physical assets, not financial instruments. While the financial arrangements (such as loans or leases) used to acquire them are financial instruments, the vehicles themselves do not represent a financial claim or contractual financial value.
- Option 1 is incorrect because it excludes currency swaps, which are financial instruments.
- Option 2 is incorrect because it includes motor vehicles, which are not financial instruments.
- Option 3 is incorrect because it includes motor vehicles, which are not financial instruments.