Which financial instrument is considered a long-term investment?

Government bonds are considered a long-term investment because they typically have maturities that extend over several years, often ranging from 10 to 30 years. When investors purchase government bonds, they essentially lend money to the government in return for periodic interest payments and the promise of return of the principal amount at maturity. This makes them a stable and predictable source of income over an extended period, attracting investors who are looking for a reliable investment over the long haul.

In contrast, short-term loans are financial instruments meant to be repaid within a short timeframe, usually under a year, making them unsuitable as long-term investments. Lines of credit provide access to funds for borrowing as needed, but they are more flexible and often used for short-term financing needs. Cash equivalents, which include highly liquid assets that can be quickly converted to cash, also fall into a short-term category as they are often held for immediate use rather than being tied up for a long duration. Therefore, government bonds stand out as the correct choice for long-term investment within the context provided.