02-21-2010, 08:48 PM
assalamualykum, i agree with both of you with definition of cash and cash equivalent. "Short-term (3 months maturity), highly liquid investments that are readily convertible into known amounts of cash and that are subject to an insignificant amount of risk of changes in value."treasury bills called T BILLS, commercial papers and money market funds are examples of cash equivalent right? ok..
here is something about mutual funds
A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund
while going through the advanges of mutual funds i got attracted by one "liquidity" (Just like an individual stock, a mutual fund allows you to request that your shares be converted into cash at any time.)
while going through different types of mutual funds i found out one of the safest form of mutual funds "<b>MONEY MARKET FUNDS"</b> The money market consists of short-term debt instruments, mostly Treasury bills.
now thing is you know better than me what treasury bills are they are short term in nature as they been specified by IAS 7 while defining cash equivalent. and when mutual fund leads me to an investemnt of money market funds specificaly in t bills than why i cannot consider them as cash equivalent? please guide me sir kamran and greatkhan
here is something about mutual funds
A mutual fund is nothing more than a collection of stocks and/or bonds. You can think of a mutual fund as a company that brings together a group of people and invests their money in stocks, bonds, and other securities. Each investor owns shares, which represent a portion of the holdings of the fund
while going through the advanges of mutual funds i got attracted by one "liquidity" (Just like an individual stock, a mutual fund allows you to request that your shares be converted into cash at any time.)
while going through different types of mutual funds i found out one of the safest form of mutual funds "<b>MONEY MARKET FUNDS"</b> The money market consists of short-term debt instruments, mostly Treasury bills.
now thing is you know better than me what treasury bills are they are short term in nature as they been specified by IAS 7 while defining cash equivalent. and when mutual fund leads me to an investemnt of money market funds specificaly in t bills than why i cannot consider them as cash equivalent? please guide me sir kamran and greatkhan
