Answer
Cash equivalents constitute short-lived investments whose liquidity is very heightened. Due to their equivalence to cash, they can be changed into cash without difficulty. The cash equivalents' maturity is relatively shorter. The simplicity of transfiguring them to real cash is what distinguishes cash equivalents from other short-term investments.
Work Step by Step
Cash equivalents constitute short-lived investments whose liquidity is very heightened. Due to their equivalence to cash, they can be changed into cash without difficulty. The cash equivalents' maturity is relatively shorter. The simplicity of transfiguring them to real cash is what distinguishes cash equivalents from other short-term investments.