Financial instruments 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 Issued by non-federal government entities, these financial instruments are debt securities that fund their capital expenditures. They are exempt from most taxes imposed in the area where the securities are issued. Issued by major banks, these short-term instruments pay higher interest than Treasury securities, but still have low returns. Risk depends on the financial strength of the bank. 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 risk of the issuing bank. 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? A. Eurodollar time deposits B. Bankers' acceptances C. Treasury bills D. Commercial paper E. Common stocks The process through which savings and loan associations (S&Ls), banks, and entities such as Fannie Mae and Freddie Mac create financial instruments Credit default swap securitization by combining other financial assets, such as mortgages and credit card debt, is called:.