This is a simplified overview of financial instrument classes in economics. ## Monetary Usually this is defined as a a current medium of exchange in general use (that must be accepted if offered = legal tender) in a particular environment (countries, economic blocks). It acts as a unit of account, meaning it provides a consistent mean of measuring the value of things. And to do that they need to act as a store of value, meaning that they keep the same value over long periods of time (years, decades). This includes things like money or generally forms of currencies. See [24.1 What Is Money? – Principles of Economics (umn.edu)](https://open.lib.umn.edu/principleseconomics/chapter/24-1-what-is-money/) ## Commodities This includes raw materials that represent a value by themselves or that can be used as inputs in the production of other goods or services. These are interchangeable with other goods of the same type and quality. This includes metals, oil or wheat. These represent a value by themselves (example: gold), but can also turned into something else (gold into jewelry). ## Securities In the broadest sense these are contracts on the future value of a thing, representing a fraction of the thing that is tradable. The Howey Test is a simple method to determine whether an instrument is a security. It asks if the purpose of a transaction is the creation of value, based on but independent of the object it represents. 1. There is an investment of money… 2. In a common enterprise… 3. With a reasonable expectation of profits… 4. To be derived from the efforts of others. See [Howey Test: Regulation and Securities | SoFi](https://www.sofi.com/learn/content/howey-test/) ## Intangible This is essentially a bucket of "everything else" that holds obvious value, but can't really defined as one of the above. Art or collectibles are a good example since they have value, but the value is only derived by the Demand, capability and willingness to pay an arbitrary price.