Please discuss with examples what is a primary financial instrument and what is a derivative financial instrument?

According to AASB 132, please answer:

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Expert Solution

Primary financial instruments are those instruments which derive its value from its own market value. Examples are bonds, currency, stock.

Derivative financial instruments are those instruments which derive its value from other financial instruments. Examples are future, option, swap. Their value depends upon primary financial instruments. Generally, it is used to hegde the future losses.

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ekkarill92 answered 1 year ago

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