Final answer:
Short-term paper with maturities of less than 3 months can be classified as Treasury bills, commercial paper, certificates of deposit, or represented within money market funds, depending on the issuer and specifics of the paper.
Step-by-step explanation:
The student has asked about the classification of short-term paper with maturities of less than 3 months. There are different types of short-term financial instruments. Treasury bills are short-term government securities with maturities ranging from a few days to 52 weeks. Commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories, and meeting short-term liabilities. Certificates of deposit (CDs) are time deposits with banks that mature at a specified date and offer a rate of return. Lastly, money market funds are investment funds that invest in short-term debt securities such as treasury bills and commercial paper.
To accurately classify short-term paper with maturities of less than 3 months, it's essential to look at the issuer and the characteristics of the paper. Treasury bills (Option 1) are indeed short-term securities issued by the government, and commercial paper (Option 2) is a type of short-term paper issued by large corporations. Certificates of deposit (Option 3) can also be issued with short-term maturities, while money market funds (Option 4) are not short-term paper in themselves but rather funds that invest in these types of instruments.