Final answer:
A liquid asset is something of value that can be rapidly converted into cash with minimal loss of value option d. Cash, checks, and credit cards are considered very liquid assets because they can be used immediately for transactions, while other financial instruments like mutual funds are also liquid due to their ability to be sold swiftly on the market.
Step-by-step explanation:
A liquid asset is defined as an asset that can be quickly converted to cash without significant loss of value option d. In the context of liquidity, cash itself is the most liquid asset because it can be immediately used to buy goods or services. Other forms of money like checks or credit cards are also considered liquid assets because they can readily be used for transactions, although they might not be as liquid as cash depending on the situation. For example, funds in a savings account are still liquid, but they require a short process to withdraw, making them less liquid than the cash in your pocket.
Moreover, some financial instruments like mutual funds are considered liquid assets because they can be sold quickly on the market to other investors. Liquidity is an important concept in finance as it pertains to the ease of converting assets to cash, which is essential for meeting immediate and short-term obligations.