In general, the higher the rate of return on an asset, the lower its liquidity.

Question

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This is because assets with higher returns often require a longer holding period or carry greater risk, which can make them more difficult to sell quickly without experiencing a loss in value. Less liquid assets tend to have a lower demand and fewer buyers, making it harder to convert them into cash quickly. Conversely, more liquid assets tend to have lower returns because they can be easily bought and sold, and thus are in higher demand.

In General, the Higher the Rate of Return on an Asset