A cash equivalent must be readily convertible to a known amount of cash, and must be...
A cash equivalent must be readily convertible to a known amount of cash, and must be sufficiently close to its maturity so its market value is unaffected by interest rate changes. True or False
Homework Answers
Answer:True
A cash Equivalent must satisfy two criteria to be recognized as cash Equivalent:
1) Be readily convertible to a known amount of cash
2) Be sufficiently close to its maturity so its market value is unaffected by the interest rate change.
Hence the statement is true.
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