Identify the financial instruments based on the following descriptions. (a) Backed by the U. S. government, these financial instruments are short-term debt obligations with a maturity of less than one year. They are considered risk-free investments. (b) Issued by money-centered financial firms, these short - or medium-term insured debt instruments pay higher interest than a regular savings account. They are low-risk instruments and have low returns. (c) These financial instruments are investment pools that buy such short-term debt instruments as Treasury bills (T-bills), certificates of deposit (CDs), and commercial paper. They can be easily liquidated. (d) These financial instruments are contractual agreements that give one party a long-term agreement to use an asset by providing regular payments.

Question

Preston Osborne

Business

12 April, 16:26

Identify the financial instruments based on the following descriptions. (a) Backed by the U. S. government, these financial instruments are short-term debt obligations with a maturity of less than one year. They are considered risk-free investments. (b) Issued by money-centered financial firms, these short - or medium-term insured debt instruments pay higher interest than a regular savings account. They are low-risk instruments and have low returns. (c) These financial instruments are investment pools that buy such short-term debt instruments as Treasury bills (T-bills), certificates of deposit (CDs), and commercial paper. They can be easily liquidated. (d) These financial instruments are contractual agreements that give one party a long-term agreement to use an asset by providing regular payments.

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Answers (1)

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Dulce Gibbs · Answer 1

(a) U. S. Treasury bills

(b) Certificates of deposit (CoDs)

(c) Money market mutual funds

(d) Leases

Explanation:

The descriptions mentioned are the definitions/characteristics of the answered financial instruments/arrangements.