Cash Equivalents

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DEFINITION of 'Cash Equivalents'

Investment securities that are short-term, have high credit quality and are highly liquid.

Also referred to as "cash and equivalents".

BREAKING DOWN 'Cash Equivalents'

Cash equivalents are one of the three main asset classes, along with stocks and bonds. These securities have a low-risk, low-return profile. Cash equivalents include U.S. government Treasury bills, bank certificates of deposit, bankers' acceptances, corporate commercial paper and other money market instruments.

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