Final answer:
The correct answer to the student's question is a) Money Market, which is a financial market for short-term borrowing and lending, typically under one year.
Step-by-step explanation:
The type of market in which securities with less than one year maturity are traded is classified as a) Money Market. The money market is a segment of the financial markets where financial instruments with high liquidity and very short maturities are traded. It is used by participants as a means for borrowing and lending in the short term, with maturities that usually range from overnight to just under a year.
Among different financial markets, the capital market is where money is loaned for periods longer than a year, for example through corporate bonds, government bonds, or long-term certificates of deposit. In contrast, the money market deals with shorter term lending and borrowing.
Further clarification includes the understanding of primary and secondary markets. In the primary market, securities are created and sold for the first time, involving direct purchase from issuers. The secondary market deals with securities already in circulation and involves buying and selling between investors.