The speed and ease by which an asset can be converted into cash is referred to as its
A)risk.
B)liquidity.
C)diversity.
D)safety.

Question

Quizplus · Accepted Answer

Liquidity refers to the ability of an asset to be easily converted into cash. This is important because it allows investors to quickly access their funds if necessary or to take advantage of other investment opportunities that may arise. Choice A (risk) is not correct because risk refers to the likelihood of an investment losing value or not achieving its expected returns. Choices C (diversity) and D (safety) are also incorrect because they do not relate specifically to the ease with which an asset can be converted into cash.

The Speed and Ease by Which an Asset Can Be