Which option is an example of a highly liquid asset?A.A money market accountB.Residential real estateC.An individual retirement accountD.A long-term bondSUBMITarrow_backPREVIOUS

The option that is an example of a highly liquid asset is A. A money market account.

Here's why:

Liquidity refers to how quickly an asset can be converted into cash without affecting its market price.

A. A money market account is highly liquid because it is a type of savings account that usually comes with a debit card or check-writing privileges, making it easy to convert to cash quickly.

B. Residential real estate is not considered highly liquid because it can take a significant amount of time to sell a property and convert it into cash.

C. An individual retirement account (IRA) is not highly liquid because, while it can be converted to cash, it can take time and there may be penalties for early withdrawal.

D. A long-term bond is not considered highly liquid because it has a fixed term of maturity, and selling it before maturity may result in loss.