A liquid asset is most appropriately described as one that is
A)cash in a checking account.
B)cash or any other asset that is easily converted to cash with no loss in market value.
C)cash or any other asset that is marketable.
D)cash and all other assets except those specifically designated as retirement assets.

Question

Quizplus · Accepted Answer

A liquid asset is an asset that can be easily converted to cash with little or no loss in its market value. Cash, savings accounts, stocks, and bonds are examples of liquid assets. Option A only includes cash, but not all liquid assets need to be in the form of cash. Option C includes marketable assets, but not all marketable assets are necessarily liquid. Option D is incorrect as retirement assets, such as 401(k)s, may have penalties for early withdrawal and may not be easily convertible to cash.

A Liquid Asset Is Most Appropriately Described as One That