A government bond is NOT as liquid as cash because the bond

Question

Quizplus · Accepted Answer

A government bond cannot be converted to spendable cash until it matures or is sold to another investor, which makes it less liquid than cash. Option B is incorrect because government bonds are issued by the government, not by companies. Option C is incorrect because government bonds don't need to be exchanged for a stock certificate to be converted to cash. Option D is incorrect because government bonds are sold at face value, and their actual value may fluctuate due to market conditions but it does not affect their convertibility to cash.

A Government Bond Is NOT as Liquid as Cash Because