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An investment that is readily convertible to a known amount of cash and that is sufficiently...

An investment that is readily convertible to a known amount of cash and that is sufficiently close to its maturity date so that its market value is unaffected by interest rate changes is a(n): Multiple Choice Short-term marketable equity security. Common stock. Operating activity. Financing activity. Cash equivalent.

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Answer #1

Answer:

OPTION E: Cash equivalent

Explanation:

Cash equivalents refer to those current assets which can be readily converted into cash.

Any investment that is unaffected by interest rate changes is readily convertible into cash and so can be called as cash equivalent.

Option A is incorrect as the investment can be either an equity investment, or a debt investment or any other type of investment.

Other options are incorrect as common stock is not an investment. Instead, it is an equity.

In case of any doubt or clarification, you're welcome to come back via comments.

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