Question

Consider the relative liquidity of the following assets: Assets 1. A share in a publicly traded company 2. A $10 bill| 3. The funds in a savings account 4. Your car Select the assets in order of their liquidity, from most liquid to least liquid. Asset Most Liquid Second-Most Liquid Third-Most Liquid Least Liquid

Answer 1

The assets in order of liquidity, from most liquid to least liquid, are a $10 bill, the funds in a savings account, a share in a publicly traded company, and a car.

Step-by-step explanation:

The relative liquidity of the assets, from most liquid to least liquid, is as follows:

1. A $10 bill: Cash is the most liquid asset because it can be used immediately for purchases.
2. The funds in a savings account: While not as liquid as cash, the funds in a savings account can still be accessed relatively easily by withdrawing cash or transferring them to a checking account.
3. A share in a publicly traded company: A share in a publicly traded company is less liquid than cash or funds in a savings account because it needs to be sold on the stock market to be converted into cash.
4. Your car: Your car is the least liquid asset as it cannot be easily converted into cash and would require finding a buyer and completing a sale.

Answer 2

A $10 bill|

The funds in a savings account

A share in a publicly traded company

Your car

Step-by-step explanation:

Liquidity measures how fast an asset can be converted to cash.

A $10 bill is already cash so it is the most liquid.

The funds in a savings account can be easily withdrawn from the account when needed. it is the second most liquid

The process of converting a share to cash is a little longer.

To sell a car, one has to find a ready buyer and negotiate the price. It is the least liquid