In liquidity management, which statement correctly distinguishes cash, cash equivalents, and short-term investments?

• A. Cash is currency; cash equivalents are near-cash with very short maturities; short-term investments have slightly longer horizons but remain liquid with modest yields
• B. Cash equivalents are physical coins; cash is a type of stock; short-term investments are long-term bonds
• C. Cash is riskier than cash equivalents; cash equivalents are illiquid
• D. Short-term investments are always risk-free and liquid

Answer: (A)