Which of the following items is not a cash equivalent?
A) Commercial paper
B) A three-year Treasury note purchased two months before its maturity
C) Money market funds
D) A corporate bond investment which has 5 years until maturity when they are purchased

Question

Quizplus · Accepted Answer

A cash equivalent is a highly liquid investment that can be easily converted into cash without a significant loss of value and with maturities of less than 90 days. While commercial paper, money market funds, and short-term Treasury notes all meet this criteria, a corporate bond investment with a remaining maturity of 5 years does not.

Which of the Following Items Is Not a Cash Equivalent