Liquidity is:
A)how quickly loans can be paid.
B)how easily an asset can be converted to cash.
C)how much cash a company has on its balance sheet.
D)None of the above are correct.

Question

Quizplus · Accepted Answer

Liquidity refers to the ease and speed with which assets can be converted to cash, making option B the correct choice. Option A is incorrect as it only refers to the repayment of loans, which does not encompass the broader concept of liquidity. Option C is also incorrect as having cash on a balance sheet does not necessarily mean that a company is liquid. Option D is incorrect as one of the options (option B) is correct.

Liquidity Is