What is the typical maturity for money market instruments?

• A. One year or less.
• B. More than five years.
• C. Exactly ten years.
• D. Indefinite.

Answer: (A)

Money market instruments are designed for short-term cash management, so they are issued with very short maturities and high liquidity. Their typical maturity is one year or less, which keeps risk low and provides quick access to funds. Examples include U.S. Treasury bills, commercial paper, and short-term certificates of deposit within the money market framework. Longer horizons—more than five years, exactly ten years, or indefinite maturities—describe long-term debt, which is not what money market instruments are about.