Question

Cash invested in a 90-day certificate of deposit will be classified under____________.

Answer 1

Cash equivalents

Step-by-step explanation:

any short-term investment securities with maturity periods of 90 days or less. They include bank certificates of deposit, banker's acceptances, Treasury bills, commercial paper, and other money market instruments.

Answer 2

Cash invested in a 90-day certificate of deposit is classified under financial assets in the money market, as it is a short-term, interest-bearing investment with the bank.

Step-by-step explanation:

Cash invested in a 90-day certificate of deposit will be classified under financial assets in the money market. A certificate of deposit, or CD, is a type of financial asset where you agree to lend a certain amount of money to a bank for a fixed period of time, in this case, 90 days, and in return, the bank agrees to pay you interest at a higher rate than a regular savings account provides. CDs are considered safe investments and are often used for short-term financial goals because they have a specified term to maturity, and the funds can’t be withdrawn before maturity without incurring a substantial penalty for early withdrawal.