Question:
Which one of the following assets is most liquid?
(1) Saving deposits
(2) Treasury bills
(3) Demand deposits
(4) Treasury bonds
(5) Real estate
Correct Answer:
(3)
Answer Explanation:
Liquidity refers to how quickly and easily an asset can be converted into cash without losing its value. Demand deposits (money in current/checking accounts) are the most liquid because they can be accessed and used for transactions instantly via cheques or debit cards.
Topic: Money and Banking Year: 2017
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