Description

Financial Instrument

Backed by the U$.$S$.$ government, these financial instruments are short$-$term debt

U$.$S$.$ Treasury notes and bonds

obligations with a maturity of less than one year. They are considered risk$-$free investments.

Issued by corporations, these unsecured debt instruments are used to fund corporate short$-$term financing requirements. If issued by a financially strong company, they have less risk.

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.

Issued by corporations, these financial instruments give their holders a class ownership in a company. They are riskier than bonds but less risky than the general class of ownership.

Which of the following instruments are traded in the capital markets? Check all that apply.

Certificates of deposit

Common stocks

Commercial paper

Long$-$term bank loans

Corporate bonds

A financial instrument whose value is derived from the value of an underlying asset is called a $$