What Does Cash Equivalent Mean?

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What does Cash Equivalent mean? Read on to discover the definition & meaning of the term Cash Equivalent - to help you better understand the language used in insurance policies.

Cash Equivalent

Cash Equivalent

short-term, highly liquid investments that are both (a) readily convertible to known amounts of cash, and (b) so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Investments with original maturities of three months or less qualify under this definition.

We hope the you have a better understanding of the meaning of Cash Equivalent.

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