Final answer:
Cash equivalents are highly liquid investments with a short maturity period, typically less than three months.
Step-by-step explanation:
Cash equivalents are highly liquid investments with a short maturity period and low risk. To be classified as cash equivalents, investments must have a maturity date no longer than [Answer] months from the date of [Answer]. This means that the investment should be easily convertible to cash within a short period of time, typically less than three months.
For example, a Certificate of Deposit (CD) is a common type of cash equivalent. It is an investment instrument with a fixed maturity date. CDs usually have a term ranging from a few weeks to a few years, but for an investment to be considered a cash equivalent, its maturity date should not exceed three months from the date of purchase.