Question:
Which of the following is most liquid?
(1) Fixed deposits
(2) Government securities
(3) Demand deposits
(4) Real estate
(5) Company shares
Correct Answer:
(3)
Answer Explanation:
Liquidity refers to the ease and speed with which an asset can be converted into cash without a loss of value. Demand deposits (current accounts) are highly liquid as they can be accessed instantly via debit cards or cheques.
Topic: Money and Banking Year: 2021
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