What term refers to fixed-interest securities issued by the government?

The correct term for fixed-interest securities issued by the government is government bonds. Government bonds are debt securities that governments issue to fund their operations and projects. These bonds pay a fixed interest rate or yield to investors over a specified period, making them a reliable source of income.

Investors typically view government bonds as low-risk investments since they are backed by the government's credit and tax-raising powers. This underscores their appeal, especially among conservative investors seeking stability and secure returns. The interest payments from these bonds, known as coupon payments, are made at regular intervals, providing a predictable cash flow.

In contrast, commercial paper represents short-term unsecured debt instruments issued by companies, usually to finance their immediate operational needs. Equity securities refer to shares of ownership in a company, which may provide dividends but do not guarantee fixed returns. Derivative instruments are financial contracts whose value is derived from the performance of underlying assets, such as stocks or commodities, and involve more complex risk profiles. Therefore, government bonds specifically align with the description of fixed-interest securities issued by the government.