The ease with which an investment can be converted into cash is called
A) profitability.
B) convertibility.
C) cashibility.
D) redemption value.
E) liquidity.

Question

Quizplus · Accepted Answer

The term used for the ease of converting an investment into cash is liquidity. Therefore, option E is the correct answer. Profitability refers to the rate of return on investment, convertibility refers to the ability to change one form of currency into another or convert preferred stock into common stock, cashibility is not a financial term, and redemption value refers to the value paid upon redemption of a debt or bond instrument.

The Ease with Which an Investment Can Be Converted into Cash