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12 July, 06:56

An asset with great liquidity is one that

A. generates high transactions costs when liquidating.

B. is an excellent store of value.

C. acts as a unit of account.

D. can be converted into a medium of exchange with relative ease and speed.

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Answers (1)
  1. 12 July, 08:06
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    D

    Explanation:

    Liquidity is an asset quality. It refers to the speed at which an asset can be sold or bought in a market. An asset is more liquid if it can be sold or bought at a quick speed, for intance, it does not generate high transaction costs. The most liquid asset example is cash. Eventhough, cash is a unit of account, there are other liquid assets that does not share this caracteristic such as shares.

    A great liquidity does not represent in all cases assets that are excellent store of value. There are iliquid assets such as houses that are good store of value.
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