Which of the following best describes short-term investments?

The characterization of short-term investments refers specifically to assets that are expected to be held for a short duration, typically less than one year. This definition aligns perfectly with the idea of investments expiring within a year. Short-term investments are often used by individuals or businesses to manage cash flow needs or to take advantage of opportunities without committing their funds for an extended period.

These investments generally include securities like treasury bills, money market funds, or short-term bonds, which can be easily converted to cash. The focus on a time frame of less than twelve months is what distinguishes these investments from long-term investments, which are meant to be held for several years or more.

The other options present concepts that do not accurately encapsulate the nature of short-term investments. For instance, assets intended for long-term holding clearly describe investments that are not in the short-term category. Similarly, investments primarily in mutual funds can be either short-term or long-term, depending on the fund's objectives and the investor's strategy, making this statement too broad. Finally, referring to long-term securities that are rarely liquidated contradicts the essence of what defines short-term investments, as these highlight the long-term nature rather than the immediate time frame that short-term investments require.