Money market securities are sometimes referred to as cash equivalents because ________.
A) they are safe and marketable
B) they are not liquid
C) they are high-risk
D) they are low-denomination

Question

Quizplus · Accepted Answer

Money market securities are often considered as cash equivalents because they are highly liquid, have low risks, and can be easily converted into cash. These securities include short-term debt instruments with high credit quality like treasury bills, commercial paper, and certificates of deposit. As they can be easily bought and sold in the market without much loss of principal, they are referred to as cash equivalents.

Money Market Securities Are Sometimes Referred to as Cash Equivalents