Which of the following statements is true when considering liquidity?


Which of the following statements is true when considering liquidity? O A. Physical assets are the most liquid type of assets

Answer

Solution

Answer- The most liquid assets usually earn 0 or little intrest

Since these liquid assets have very low risk and therefore since the risk is low the return is also low in these assets as compared to other assets ,which are more riskier and thus attract more intrests

Wrong option

Physical assets are most liquid type-This is not true(Land etc are not very liquid)

Stocks have no transaction fees- This is untrue as the stocks due have transaction fees attached to them

There can be financial loss in the bonds if the intrest rates change then there can be loss .Also in case of default too there is loss

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