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e. the final six months of fascination is foregone). If a economic establishment would not website allow this feature, the CD should not be handled as a cash equivalent. This is certainly very true for for a longer period-term products for instance five-year CDs that have to be held to maturity.

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As an alternative, Keeping cash and cash equivalents is commonly a secure spot for firms to park resources they're going to need in the future.

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Cash is obviously direct ownership of cash, even though cash equivalents depict possession of a fiscal instrument That usually ties to some claim to cash.

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