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Examples of cash equivalents include, time deposits, certificates of deposit, and marketable securities. True or False

1 Answer

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Final answer:

The statement is true as time deposits, certificates of deposit, and marketable securities are cash equivalents due to their high liquidity and minimal risk.

Step-by-step explanation:

The statement that examples of cash equivalents include time deposits, certificates of deposit, and marketable securities is true. Cash equivalents are short-term, highly liquid investments that are easily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. As detailed in the information provided, time deposits like certificates of deposit (CDs) are part of the M2 money supply, which also includes savings deposits and money market funds. CDs are interest-bearing loans to banks, governments, or corporations, and they have specific terms, such as interest rates and due dates. Marketable securities are also considered cash equivalents if they have short maturities and are easily convertible into cash.

answered
User Todd M
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