Which of the following assets is the most liquid?
A. A television
B. Stocks and bonds
C. Ten acres of land
D. Funds in a checking account
E. A car

Answers

Answer 1

Funds in a checking account is the most liquid asset of the following options listed below. Liquidity refers to the ease with which assets can be converted into cash.

A liquid asset is one that can be quickly converted to cash with little to no impact on its value. Checking account funds, stocks and bonds, and some mutual funds are examples of highly liquid assets. They may be easily converted to cash without any material decline in their worth.A television is not an asset because it is a consumer good, not an investment. It cannot be used to produce income or appreciates in value. Stocks, bonds, and mutual funds are relatively liquid because they can be converted into cash in a matter of days.

Ten acres of land is not a liquid asset because it cannot be converted to cash quickly. It takes time to sell land. The value of the land could decrease during the time it takes to sell it, making it a less valuable asset.Funds in a checking account are the most liquid assets because they can be easily withdrawn and used to pay for goods and services. A car is not a liquid asset since it would take time to find a buyer and convert it to cash. Therefore, the correct option is D. Funds in a checking account.

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