What is the difference between a financial instrument and a financial tool

What is the difference between a financial instrument and a financial tool Introduction: The Overlapping Terminology Hello everyone! Welcome to today's video, where we'll be exploring the intriguing world of finance. Often, we come across terms that seem similar, yet carry distinct meanings. One such pair is 'financial instrument' and 'financial tool.' While they might appear synonymous at first glance, they have their own significance in the financial landscape. So, let's dive in and unravel the intricacies! Defining Financial Instruments: The Building Blocks To comprehend the difference, let's start by understanding what each term signifies. A financial instrument refers to any contract or agreement that holds monetary value. It can be a tangible asset, like stocks or bonds, or an intangible one, like derivatives. Essentially, it's a medium through which investors can buy, sell, or trade financial assets. These instruments are governed by legal frameworks and often have associated risks and rewards. Exploring Financial Tools: The Practical Applications