Which of the following would not be considered a cash equivalent?
A)A 30-day certificate of deposit.
B)A ten-year Treasury note purchased over nine years ago,which matures in two months.
C)A three-month Treasury bill.
D)A money market fund held at the local bank.

Question

Quizplus · Accepted Answer

A cash equivalent is a short-term, highly liquid investment that is readily convertible to cash and carries minimal risk of a change in value. A 30-day certificate of deposit, a three-month Treasury bill, and a money market fund held at the local bank are all considered cash equivalents. However, a ten-year Treasury note purchased over nine years ago, which matures in two months, is not a cash equivalent because it is not a short-term investment and carries a higher risk of a change in value.

Which of the Following Would Not Be Considered a Cash