Financial Instrument

Description

Backed by the U$.$S$.$ government, these financial instruments are fixed$-$rate debt securities with a maturity of more than one year. They are considered default free but are subject to interest rate risk.

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.

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 considered the most risky but provide higher expected returns.