Explanation:
Money market securities are short-term debt instruments that are highly liquid and have a maturity period of one year or less. They are considered low-risk investments and are issued by governments, financial institutions, and corporations. Examples of money market securities include Treasury bills, commercial paper, and certificates of deposit. These securities are typically used by investors for parking their funds temporarily until they find a more lucrative investment opportunity. The short maturity period of these securities allows investors to get their principal amount back within a short span, thereby reducing the risk of price fluctuations due to market volatility.
Choice B is incorrect. Capital market securities typically have a maturity period that exceeds one year. They include long-term instruments such as stocks and bonds, which are used by businesses to raise capital for their long-term needs.
Choice C is incorrect. Federal agency securities can have varying maturity periods, ranging from less than a year to several years. Therefore, they cannot be classified as securities that mature within one year.
Choice D is incorrect. Certificates of deposits (CDs) also have varying maturities and can range from a few months to several years depending on the terms set by the issuing bank. Hence, it's not accurate to categorize all CDs as maturing within one year.
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