financial assets are pieces of paper with contractual obligations. some short-term (i.e., they mature in less than a year) are instruments with low default risk are u.s. treasury bills, banker's acceptances, commercial paper, negotiable CDs, and eurodollar deposits. Commercial loans (which have maturities up to seven years) have rates that are usually tied to the prime rate (i.e., the rate that U.S. banks charge to their best customers) or LIBOR (the London interbank offered rate, which is the rate that banks in the U.K. charge one another.