The liquidity of an investment refers to how quickly it can be converted into cash without affecting its market price. Here are the options broken down:

1. Certificate of Deposit (CD): This is a time-specific investment offered by banks with a fixed, pre-determined interest rate. Its liquidity is low because you cannot withdraw your money before the maturity date without paying a penalty.

2. Mutual Fund: This is a type of investment where funds are pooled from many investors to invest in securities like stocks, bonds, etc. Mutual funds are fairly liquid as they can typically be sold on any business day, but it may take a few days for the transaction to settle and for you to receive your money.

3. Savings Account: This is a deposit account held at a bank or other financial institution. It is highly liquid because you can withdraw your money at any time.

4. Government Bond: This is a debt security issued by a government to support government spending. They can be sold before maturity, but the price you get may be more or less than you paid, depending on interest rates at the time of sale.

So, out of these options, a savings account is the most liquid investment.

Question

The liquidity of an investment refers to how quickly it can be converted into cash without affecting its market price. Here are the options broken down:

1. Certificate of Deposit (CD): This is a time-specific investment offered by banks with a fixed, pre-determined interest rate. Its liquidity is low because you cannot withdraw your money before the maturity date without paying a penalty.

2. Mutual Fund: This is a type of investment where funds are pooled from many investors to invest in securities like stocks, bonds, etc. Mutual funds are fairly liquid as they can typically be sold on any business day, but it may take a few days for the transaction to settle and for you to receive your money.

3. Savings Account: This is a deposit account held at a bank or other financial institution. It is highly liquid because you can withdraw your money at any time.

4. Government Bond: This is a debt security issued by a government to support government spending. They can be sold before maturity, but the price you get may be more or less than you paid, depending on interest rates at the time of sale.

So, out of these options, a savings account is the most liquid investment.

Knowee AI · Accepted Answer

The liquidity of an investment refers to how quickly it can be converted into cash without affecting its market price. Here are the options broken down:

1. Certificate of Deposit (CD): This is a time-specific investment offered by banks with a fixed, pre-determined interest rate. Its liquidity is low because you cannot withdraw your money before the maturity date without paying a penalty.

2. Mutual Fund: This is a type of investment where funds are pooled from many investors to invest in securities like stocks, bonds, etc. Mutual funds are fairly liquid as they can typically be sold on any business day, but it may take a few days for the transaction to settle and for you to receive your money.

3. Savings Account: This is a deposit account held at a bank or other financial institution. It is highly liquid because you can withdraw your money at any time.

4. Government Bond: This is a debt security issued by a government to support government spending. They can be sold before maturity, but the price you get may be more or less than you paid, depending on interest rates at the time of sale.

So, out of these options, a savings account is the most liquid investment.

Multiple Choice QuestionWhich of the following is a more liquid investment?Multiple choice question.certificate of depositmutual fundsavings accountgovernment bond

Question

Solution

Similar Questions

Upgrade your grade with Knowee