Riverview Chemical recently issued some debt that had an original maturity of nine months. This debt is best classified as a(n):
A)option contract.
B)money market instrument.
C)fixed-income security.
D)derivative security.
E)futures contract.

Question

Quizplus · Accepted Answer

Debt with a maturity of less than one year is typically classified as a money market instrument, which includes short-term debt securities such as commercial paper and certificates of deposit. Option contracts, derivative securities, and futures contracts are all types of financial instruments that offer investors the potential to profit from changes in underlying assets, but do not represent debt obligations like bonds or loans. Fixed-income securities refer to any type of investment that generates a fixed stream of income, such as bonds or preferred stock, but this particular debt from Riverview Chemical does not have a fixed income component.

Riverview Chemical Recently Issued Some Debt That Had an Original