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".

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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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