Business and Personal Finance Dictionary

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• CASH EQUIVALENT
  
  Low-risk investments, such as money market funds or short-term certificates of deposit (CDs), are considered cash equivalents. The Financial Accounting Standards Board (FASB), which is responsible for establishing national accounting standards, defines cash equivalents as highly liquid securities with maturities of less than three months. Liquid securities typically are those that can be sold easily with little or no loss of value.
  
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