Which of the following characteristics does not apply to cash equivalents?
A) Short-term
B) Highly-liquid
C) Readily convertible into cash
D) Sensitive to interest rate changes

Question

Quizplus · Accepted Answer

Cash equivalents are not sensitive to interest rate changes. They are investments that are easily converted into cash and have a maturity of three months or less. They are also highly liquid and considered short-term assets. However, they do not fluctuate in value based on changes in interest rates.

Which of the Following Characteristics Does Not Apply to Cash