Final answer:
The statement that money market securities have maturities of one year or less is true. Money market instruments are designed for short-term investment, involving less risk and offering quick returns as compared to capital market instruments.
Step-by-step explanation:
True. Money market securities have maturities of one year or less. These include short-term instruments such as Treasury bills, commercial paper, and money market mutual funds. Unlike capital market instruments, which are loaned for more than one year and include corporate bonds, government bonds, and long-term certificates of deposit, money market instruments are designed for those seeking a temporary place to park their funds with a quick return and low risk. They are part of the M1 money supply, which also includes currency and checking accounts, and, to a lesser extent, traveler's checks.
Money market accounts, which are included in the M2 money supply, offer some liquidity while typically yielding a higher interest rate than checking accounts. They can consist of small CDs, individual money market mutual fund balances, and savings accounts. It's important for investors to understand that while money market securities are accessible and low in risk, they differ significantly from capital market securities in terms of their maturity and stability.