Question

Consider the relative liquidity of the following assets: Assets 1. A $50 bill 2. The funds in a savings account 3. A boat you own 4. A bond issued by a publicly traded company 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

Answer:

1,2,4,3

Explanation:

Liquidity measures how quickly an asset can be converted and used as a medium of exchange.

$50 bill is the most liquid because it can be readily used as a medium of exchange without any conversion.

The funds in a savings account is the second most liquid because because it must first be withdrawn from a bank account before it can be used as a medium of exchange. It can be converted to a medium of exchange within a day.

A bond issued by a publicly traded company is the third most liquid because it takes a longer period for it to be converted to cash.

A boat is the least liquid because it takes a long while to find a buyer for a boat.

I hope my answer helps you.