Which of the following observations is NOT true of a liquid asset?
A)It can be turned into cash quickly.
B)Conversion to cash entails low transaction costs.
C)Conversion to cash happens with little or no loss in principal value.
D)It is traded in an active market.
E)Large transactions may move its market price substantially.

Question

Quizplus · Accepted Answer

A liquid asset is typically characterized by its ability to be easily and quickly converted into cash with low transaction costs and little to no loss in value. It is also typically traded in an active market, meaning that buying and selling of the asset occurs frequently. However, large transactions may still impact the market price of the asset, so statement E is not necessarily true.

Which of the Following Observations Is NOT True of a Liquid