Consider the following: 1. Exchange-Traded Funds (ETF) 2. Motor vehicles 3. Currency swap Which of the above is/are considered financial instruments?

Answer: D. ETFs and Currency Swaps are financial instruments; motor vehicles are NOT. Financial instruments are monetary contracts that create financial assets for one party and financial liabilities/equity for another. (1) Exchange-Traded Funds (ETF): YES. ETFs are pooled investment securities traded on stock exchanges. Each unit represents fractional ownership of an underlying basket. Clearly a financial instrument. (2) Motor Vehicles: NO. A motor vehicle is a tangible physical asset (real/personal property). It is not a financial contract or claim on cash flows. (3) Currency Swap: YES. A derivative contract between two parties to exchange principal and interest payments in different currencies. A textbook financial instrument used for hedging and liquidity management. So 1 and 3 only. Answer D. Source: SEBI Financial Instruments classification / RBI Derivative Markets handbook.