Which of the following is classified as a short-term money market instrument?

Certificates of Deposit (CDs) are indeed classified as short-term money market instruments when they have a maturity of one year or less. Money market instruments are typically characterized by their short maturities, high liquidity, and low credit risk, making them ideal for investors looking to preserve capital while earning a modest return. CDs, specifically, are time deposits offered by banks, which pay a fixed interest rate for a specified term. Investors can choose various terms, and those with shorter maturities are especially relevant in the context of short-term investments.

In contrast, the other options do not fit the classification of short-term money market instruments. Bonds with a maturity of over ten years represent long-term investments with significantly higher risk and duration. Stocks traded on stock exchanges are equity securities and involve ownership in a company; they have no fixed maturity and are subject to market volatility. Real estate investment trusts (REITs) allow investors to buy shares in real estate portfolios and also do not have the characteristics of money market instruments, as they typically involve longer-term investments in physical property or mortgages.