Which investment is likely to be the most liquid? (2024)

Which investment is likely to be the most liquid?

Cash is the most liquid asset, followed by cash equivalents, which are things like money market accounts, certificates of deposit (CDs), or time deposits. Marketable securities, such as stocks and bonds listed on exchanges, are often very liquid and can be sold quickly via a broker.

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What investment is the most liquid?

In order of liquidity, the most liquid investments include: Money – actual cash currencies. Money market assets – short-term debt securities such as CDs or T-bills. Marketable securities – stocks or bonds.

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Which one of the following would be the most liquid investment?

Cash is the most liquid asset possible as it is already in the form of money. This includes physical cash, savings account balances, and checking account balances. It also includes cash from foreign countries, though some foreign currency may be difficult to convert to a more local currency.

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Which is liquid type investment?

Mutual funds are considered liquid because investors can sell their shares at any time and receive their money within days. Liquid assets are used by both businesses and consumers.

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What type of account would be considered the most liquid?

Liquidity in finance by the book is how quickly any asset can be changed in to hard cash. Therefore, any account having only cash can be said as the most liquid. For instance, a checking or a saving account could be considered the most liquid accounts.

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What is the safest most liquid investment?

The Best Safe Investments of January 2024
Investment TypeSafetyLiquidity
Treasury bills, notes and bondsHighHigh
Money market mutual fundsHighHigh
Treasury Inflation-Protected Securities (TIPS)HighHigh
High-yield savings accountsHighHigh
3 more rows
Jan 3, 2024

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What is the most and least liquid investment?

Liquidity typically decreases in this order:
  • Cash in a savings account (the most liquid)
  • Publicly-traded stocks.
  • Corporate bonds.
  • Mutual funds.
  • Exchange-traded funds.
  • Assets like real estate, private equity, and collectibles (the least liquid)

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What is the most liquid type of investment quizlet?

The most liquid type of investment is: A money market account, The most liquid type of savings is a statement savings account. You can withdraw money from it quickly and easily at any time without penalty.

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Which investment has the highest liquidity quizlet?

Money market funds are the most liquid investment. In virtually all cases, they come with check-writing privileges.

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What does it mean if an investment is highly liquid?

In personal finance, liquid assets are investments an individual may easily convert to cash without incurring fiscal penalties. Most liquid investments — commonly stocks, bonds and mutual funds, among others — can be bought and sold throughout the trading day.

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Which are the liquid funds?

Liquid funds are a class of debt funds that predominantly invest in high-quality fixed instruments that mature within 91 days. The asset allocation of liquid funds is made towards certificates of deposit, treasury bills, commercial papers, and so on.

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What are types of liquid funds?

Liquid Funds are money market instruments like certificates of deposit, treasury bills, and commercial papers. There is no lock-in period for these funds and hence are highly liquid.

Which investment is likely to be the most liquid? (2024)
What type of property investment is more liquid than any other?

Publicly traded REITs also offer more liquidity than other real estate investments: If you find yourself suddenly needing some cash, you can sell your shares on the stock exchange. If you want to invest in publicly traded REITs, you can do so through a brokerage account.

Which of the following items is the most liquid?

Cash is the most liquid asset because it is readily available and it can be used to make a transaction immediately, since it does not require to be converted into another form.

What are the accounts most liquid to least liquid?

Order of liquidity for assets on a balance sheet
  1. Cash. Companies consider cash to be the most liquid asset because it can quickly pay company liabilities or help them gain new assets that can improve the business's functionality. ...
  2. Marketable securities. ...
  3. Accounts receivable. ...
  4. Inventory. ...
  5. Fixed assets. ...
  6. Goodwill.
Jun 24, 2022

What are the least liquid to most liquid accounts?

Order of liquidity is the presentation of various assets in the balance sheet in the order of time taken by each to get converted into cash, whereby cash is considered as the most liquid asset, followed by cash and cash equivalents, marketable securities, account receivables, inventories, non-current investments, loans ...

Is Liquid a good investment?

Key Takeaways. Liquid assets are easy to turn into cash with little loss in value, which makes them great for paying for unexpected costs. Cash in checking, savings, money market, and certificate of deposit accounts, as well as the cash value of some life insurance plans, are all examples.

How risky is liquid fund?

Hence, the NAV of the fund remains almost steady. This makes liquid funds low-risk investments. However, it is important to note that if the credit rating of any underlying security drops, then the NAV can experience a drop too. Liquid funds are NOT risk-free.

What type of investment has the highest risk?

While the product names and descriptions can often change, examples of high-risk investments include:
  • Cryptoassets (also known as cryptos)
  • Mini-bonds (sometimes called high interest return bonds)
  • Land banking.
  • Contracts for Difference (CFDs)

What are some of the most liquid stocks?

Among the large-cap universe of stocks are many household names known for high liquidity. Apple (NASDAQ:AAPL), Tesla (NASDAQ:TSLA), and Facebook (NASDAQ:FB) are all great examples of highly liquid stocks.

What is a less liquid investment?

(10) Less liquid investment means any investment that the fund reasonably expects to be able to sell or dispose of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, as determined pursuant to the provisions of paragraph ...

Which is the most liquid asset quizlet?

Among the choices, the one that should be considered as the most liquid asset is cash itself.

Which money has more liquidity?

Currency is most liquid because you can use it as and when you want. A time deposit with the bank (e.g. fixed deposit), are the least liquid compared to a savings/demand deposit with banks and currency.

What is the highest liquidity ratio?

In short, a “good” liquidity ratio is anything higher than 1. Having said that, a liquidity ratio of 1 is unlikely to prove that your business is worthy of investment. Generally speaking, creditors and investors will look for an accounting liquidity ratio of around 2 or 3.

Which type of financial asset has the most liquidity?

Cash is the most liquid asset because you can use it immediately.


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