Financial instruments are pieces of paper that provide evidence of a financial obligation or promise to pay the buyer at some future date. The buyer is known as an investor. The sellers of these instruments are usually businesses who want to raise long term funds for their various projects. Investments can earn the investor a regular income in the form of interest or dividends.
It is also possible that the value of the investment may increase over time so that when the investor decides to sell, there would be some additional income over and above what he or she initially paid. In Fiji, we have a small and developing Capital Market and currently there are three main types of financial instruments that are sold.