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Which of the following asset classes is generally considered to be the most liquid?

a) inventories
b) cash
c) accounts
d) receivable

1 Answer

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Final answer:

Cash is the most liquid asset due to its immediate usability for transactions, as opposed to inventories or accounts receivable which require conversion to cash.

Step-by-step explanation:

The asset class that is generally considered to be the most liquid is cash. Liquidity refers to how quickly you can use a financial asset to buy a good or service. Cash, such as the money in your pocket, is the most liquid asset because it can be easily and immediately used to conduct transactions, like buying a hamburger. In contrast, other assets like inventories, accounts receivable, and money in a savings account require more time to be converted into cash and may not be used directly for transactions.

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