An asset is liquid if it
A) is of intrinsic value.
B) can be exchanged for other goods and services.
C) is a store of value.
D) can be obtained or disposed of without losing much of its nominal value.

Question

Quizplus · Accepted Answer

A liquid asset is one that can be easily converted into cash without significant loss in nominal value. Option D correctly describes this characteristic of a liquid asset. Options A, B, and C may be true for some assets, but they do not specifically define what makes an asset liquid.

An Asset Is Liquid If It