Explanation:

Primary instruments are standard financial investments. They often trade on mainstream exchanges with high levels of liquidity. Their market value is determined based on assumptions about their individual characteristics.  
Primary investments like stocks are what most beginning investors think of when they think about investing. This is because investing in primary instruments often requires only a general knowledge of markets and investment principles.  
Understanding primary instruments provides the base knowledge for derivatives. Derivatives were created to hedge against some of the risks of primary instruments. Derivatives also provide products for alternative investing strategies that are based on the speculation of values of underlying primary instruments.   
.A primary instrument is a financial investment whose price is based directly on its marketvalue.
.Primary instruments include cash-traded products like stocks, bonds, currencies, and spotcommodities.
.Understanding primary instruments provides the base knowledge for derivatives, whose prices are derived from the primary (underlying)asset.