Asset-backed commercial paper may or may not be considered a cash equivalent, depending on the term and risk profile of these investments.

Question

Quizplus · Accepted Answer

Asset-backed commercial paper (ABCP) can be considered a cash equivalent if it has a short-term maturity and low risk profile, as it is highly liquid and can be easily converted into cash. However, if the ABCP has a longer-term maturity or a higher risk profile, it may not be considered a cash equivalent as it may be less liquid and subject to market fluctuations.

Asset-Backed Commercial Paper May or May Not Be Considered a Cash