Which of the following lists correctly orders assets from most liquid to least liquid?
A) Stocks, house, paper currency, savings deposits
B) Stocks, paper currency, house, savings deposits
C) Savings deposits, paper currency, house, stocks
D) Paper currency, savings deposits, stocks, house

Question

Quizplus · Accepted Answer

Liquidity refers to how quickly and easily an asset can be converted into cash without significantly affecting its value. Paper currency is the most liquid asset as it is already in cash form. Savings deposits are next, as they can be quickly accessed and converted to cash. Stocks, while relatively liquid, may take some time to sell and the price can vary. Houses are considered the least liquid as they take the longest time to sell and convert into cash.

Which of the Following Lists Correctly Orders Assets from Most