Financial instruments are assets that have a monetary value or record a monetary transaction. To coordinate the exchange of capital between borrowers and lenders, financial instruments trade in the financial markets. These financial instruments can be categorized on the basis of their issuers, maturity, risk, and other factors.

Identify the financial instruments based on the following descriptions.

Description

Financial Instrument

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

U$.$S$.$ Treasury bills investments.

Issued by a nonfinancial firm, these financial instruments are guaranteed by a bank.

Bankers' acceptances

There is less risk involved because of bank backing.

These financial instruments are U$.$S$.$ dollar deposits outside the United States that earn interest over a certain time period. Risk associated with these deposits depends on the

Money market mutual funds

risk of the issuing bank.

These financial instruments are contractual agreements that give one party a long$-$term agreement to use an asset, by providing regular payments.

Preferred stocks