Final answer:
Trading securities are not classified as cash equivalents because they are not as liquid as U.S. Treasury bills, commercial paper, or money market funds, which are considered short-term, low-risk investments.
Step-by-step explanation:
Among the given options, trading securities would not be classified as cash equivalents. Cash equivalents are highly liquid investments with a very short maturity date, typically 90 days or less. They include instruments like U.S. Treasury bills and commercial paper, which are often used by companies and investors to meet short-term financial obligations. These investments are known for their low risk and high liquidity.
In contrast, trading securities can include stocks or bonds that a company may hold for the purpose of selling them in the near term to realize a gain; these are not as liquid as cash equivalents. Money market funds, which consist of short-term securities, are also considered to be cash equivalents and they are categorized within M2, indicating their high liquidity and degree of safety similar to cash.