Which of the following are characteristics of a liquid asset?
A) Provide high yields.
B) Are highly specialized equipment.
C) There is a signiﬁcant loss in value if sold.
D) Include the ﬁrm's shares and bonds.
E) Can be converted into cash quickly, with little or no loss in value, and generally earn low returns.

Question

Quizplus · Accepted Answer

A liquid asset is an asset that can be easily converted into cash with little or no loss in value. Liquid assets generally earn low returns, but they are highly desirable because they can be quickly accessed in case of an emergency or other need for cash. options A, B, and C are not characteristics of a liquid asset. Option D may include some liquid assets, but it is not a defining characteristic of liquid assets.

Which of the Following Are Characteristics of a Liquid Asset