Which debt securities mature in one year or less at issuance?

Which debt securities mature in one year or less at issuance?

• A. Corporate bonds
• B. Money market instruments
• C. Government bonds
• D. Mortgage-backed securities

Answer: (B)

Money market instruments are specifically designed to be short-term debt securities that mature in one year or less from their date of issuance. These instruments are typically used for the management of short-term funding needs and include Treasury bills, commercial paper, and repurchase agreements, among others. Their short maturities mean that they are considered low risk and are often used by investors seeking liquidity and safety. In contrast, corporate bonds and government bonds typically have longer maturities, generally exceeding one year, which categorizes them as long-term securities. Mortgage-backed securities can also have a range of maturities, but they usually do not fit into the short-term classification that money market instruments do. Thus, money market instruments are the appropriate choice as they specifically target the very short-term debt market.

Money market instruments are specifically designed to be short-term debt securities that mature in one year or less from their date of issuance. These instruments are typically used for the management of short-term funding needs and include Treasury bills, commercial paper, and repurchase agreements, among others. Their short maturities mean that they are considered low risk and are often used by investors seeking liquidity and safety.

In contrast, corporate bonds and government bonds typically have longer maturities, generally exceeding one year, which categorizes them as long-term securities. Mortgage-backed securities can also have a range of maturities, but they usually do not fit into the short-term classification that money market instruments do. Thus, money market instruments are the appropriate choice as they specifically target the very short-term debt market.