Liquidity refers to the ease with which an asset can be converted into a means of payment with little loss of value. This means that highly liquid assets, such as cash or easily tradable securities, can be quickly and easily converted into a form of payment, whereas less liquid assets, such as real estate or fine art, may require more time and effort to be converted into cash without losing value.

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Liquidity Is the

Question 85

Multiple Choice

Liquidity is the

A) ease with which an asset can be converted into a means of payment with little loss of value.
B) ease with which credit cards are accepted as a means of payment.
C) degree to which money can be converted into an asset with little loss of value.
D) degree to which an asset acts as money without a loss of value.

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