The cash markets include securities, currencies, and physical commodities (see Figure 2.1). The unifying characteristic is that the purchaser is buying the asset that is traded. The securities subcategory includes instruments commonly referred to as “stocks and bonds” but more accurately labeled as “equities and fixed income” (U.S.) or “fixed interest” (U.K.). Currencies and physical commodities are included because they are traded in liquid markets, and the asset (a currency position or a quantity of a commodity) is actually purchased.


Figure 2.1 Cash instruments are financial and commercial assets that provide specific value to investors, ...

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