Chartered Market Technician (CMT) Practice Exam

Treasury bills are short-term government securities that typically have maturities of one year or less. They are issued by the U.S. Department of the Treasury to raise funds and are considered one of the safest investments because they are backed by the full faith and credit of the U.S. government. Treasury bills are often sold at a discount to their face value, and investors receive the face value upon maturity, making them a popular choice for institutions and individual investors seeking to preserve capital while earning a return over a short period.

In contrast, corporate bonds and treasury notes generally have longer maturities. Corporate bonds can have maturities ranging from a few years to several decades, while treasury notes typically have maturities of two to ten years. Common stocks, on the other hand, represent ownership in a company and do not have a defined maturity period, making them unsuitable for the context of short-term instruments. Thus, treasury bills stand out as the instrument specifically associated with short maturity periods of less than one year.