Question

Rank the following assets in terms of​ liquidity, from the most liquid to the least​ liquid:

​
a) Savings​ Account;
​b) Cash;
​c) Land;
​d) a U.S. Savings Bond

Answer 1

The correct answer is b) Cash.

Step-by-step explanation:

In terms of liquidity, the assets can be ranked from most liquid to least liquid as follows:

1. Cash: Cash is the most liquid asset as it can be easily used to buy goods or services.
2. Savings Account: Although not as liquid as cash, a savings account allows you to withdraw funds easily from a bank or ATM.
3. U.S. Savings Bond: A savings bond is less liquid than cash or a savings account because it cannot be easily converted into cash. It requires going through a process to redeem the bond.
4. Land: Land is the least liquid asset among the options given. It is not as easily and quickly convertible into cash compared to the other assets.