Which is the most liquid asset?
Understand the Problem
The question is asking for the identification of the most liquid asset, which refers to an asset's ability to be quickly converted into cash without significantly affecting its value.
Answer
Cash
The most liquid asset is cash.
Answer for screen readers
The most liquid asset is cash.
More Information
Cash is considered the most liquid asset because it can be used immediately for transactions without the need for conversion.
Tips
A common mistake is to consider other easily accessible assets like stocks or bonds as more liquid; however, these still require a conversion process, whereas cash does not.
Sources
- What Is a Liquid Asset, and What Are Some Examples? - Investopedia - investopedia.com
- What are liquid assets and non-liquid assets? - Brex - brex.com
- Understanding Liquidity And Liquid Assets - Investing - Forbes - forbes.com
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