In working with the Millers on their investment strategy, Milton noticed that they have most of their money tied up in their house. He suggests that if they need cash quickly, they will have problems with
A) available funds.
B) liquidity.
C) risk.
D) speculation.
E) asset allocation.

Question

Quizplus · Accepted Answer

Liquidity refers to how quickly and easily an asset can be converted into cash without significantly affecting its value. Since the Millers have most of their money tied up in their house, converting this asset into cash quickly (e.g., through selling the house) might be challenging, thus presenting a liquidity issue.

In Working with the Millers on Their Investment Strategy, Milton