Short-term instruments are financial assets that typically have maturities of one year or less. They are often used by investors to manage liquidity and minimize risk. Common examples include Treasury bills, commercial paper, and certificates of deposit. These instruments usually offer lower returns compared to long-term investments but provide quick access to cash. Investors favor short-term instruments for their stability and predictability. They are ideal for those looking to preserve capital while earning a modest return. Additionally, these instruments are often considered safer than stocks, making them a popular choice for conservative investors or those with short-term financial goals.