Question

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.

Answer 1

Answer:

(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.