Short-term investments are characterized by being readily marketable and intended to be converted into cash within a short period, typically one year or less. This liquidity is a fundamental aspect of short-term investments, as it allows businesses and individuals to access cash quickly to meet immediate financial needs or to take advantage of other investment opportunities. These assets typically include stocks, bonds, and money market instruments that can be easily sold in the market.
The other options do not accurately describe short-term investments. For instance, while some short-term investments may be held for speculative purposes, this is not a defining characteristic, as many are held for liquidity rather than speculation. Illiquid assets requiring long-term commitment, as mentioned in another option, directly contradict the nature of short-term investments, which emphasize liquidity. Lastly, the idea of assets that depreciate rapidly suggests a focus on certain types of assets like fixed assets or specialized inventory rather than the financial instruments typical of short-term investments. Thus, the defining quality of being readily marketable and easily convertible into cash is what establishes the correct understanding of short-term investments.