For an investment to qualify as a cash equivalent, it must be readily convertible to a known amount of cash and
A. it must be identified as a cash equivalent on the income statement.
B. must be sufficiently close to its maturity date so that its market value is relatively insensitive to interest rate changes.
C. the investment must have a known foreign exchange rate.
D. it must mature within 4 months.
Ans: B. must be sufficiently close to its maturity date so that its market value is relatively insensitive to interest rate changes.
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