Why are money market securities sometimes referred to as “cash equivalents”?
Money market securities are referred to as cash equivalents because they are highly liquid.
Money market securities are very short term debts which are highly marketable and carry a lower risk.
Money market securities are sometimes referred to as “cash equivalents” because of the great liquidity they offer. The prices of such securities are very stable and hence they can be easily converted to cash at a very short notice.
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