Classify the financial instruments on the basis of the nature of the buyer's commitment.Explain each of the financial instruments.

Financial instruments can be classified based on the nature of the buyer's commitment into three broad categories: Fixed-Income Instruments, Equity Instruments, and Derivative Instruments. Each category has distinct characteristics that determine the risk and return profile of the investment.  

### 1. Fixed-Income Instruments  
Fixed-income instruments are financial securities that provide a fixed return to investors in the form of periodic interest payments and the repayment of the principal at maturity. These are generally considered low-risk investments compared to equity and derivatives.  

- Bonds: Bonds are debt securities issued by corporations, governments, or financial institutions. They promise to pay periodic interest (coupon payments) and return the principal at maturity. Examples include government bonds, municipal bonds, and corporate bonds.  
- Debentures: These are unsecured debt instruments issued by corporations. They rely on the issuer’s creditworthiness rather than collateral. Convertible debentures can be ___ __________ ___ _______ ___.
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