Question

The ease with which investments convert to cash determines their __________. A. value B. liquidity C. interest rate D. conversion rate

Answer 1

The ease with which investments convert to cash determines their liquidity.

Step-by-step explanation:

The term liquidity can be defined as the amount of cash and cash equivalents.

In more simple words, the meaning of liquidity can be further defined as the difference between the size of trade and the speed of sale for the price it can be sold.

Investment is the portion of income that is spent to build real capital which includes new capital equipment and machines, construction of new buildings, increase in stock, etc.

Answer 2

The corret answer is option:

B. Liquidity.

Step-by-step explanation:

In economics, liquidity represents the quality of assets to be converted into cash immediately without significant loss of value. So the easier it is to convert an asset into money, the more it is said to be liquid.