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23 October, 08:41

Which type of account typically has low liquidity?

a-checking account

b-savings account

c-money market account

d-certificate of deposit

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Answers (1)
  1. 23 October, 12:15
    0
    First we must consider the definition of "liquidity." Liquidity means that you can quickly withdraw money from the account-with this in mind, the answer becomes clear.

    Checking accounts, Savings accounts, and money market accounts can all be withdrawn from easily. Thus, they have high liquidity.

    However, a certificate of deposit (CD for short) does not. A CD requires that you put in your money for a set amount of time, for example 5 years. You cannot withdraw it until the 5 years is up. Low liquidity.

    Therefore the answer is D: Certificate of deposit.
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