BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Asset which is not usable as a medium of exchange but has as store of value.
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Asset that serves as a temporary medium of exchange and has a store of value.
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Asset which adequately fulfill Store of value function and is readily convertible into a medium of exchange but is not itself a medium of exchange.
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Asset which has a store of value & 100% liquidity
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Detailed explanation-1: -Examples of near money assets include savings accounts, certificates of deposit (CDs), foreign currencies, money market accounts, marketable securities, and Treasury bills (T-bills). In general, near money assets included in near money analysis will vary depending on the type of analysis.
Detailed explanation-2: -Crowther defines money as ‘anything that is generally acceptable as a means of exchange and at the same time acts as measure and store of value. ‘
Detailed explanation-3: -T-bills, Equity shares of a company, Bill of exchange and Debentures are all considered as near money.
Detailed explanation-4: -Near money: Near money refers to those assets which may not be a perfect medium of exchange but are highly liquid i.e. those assets that can be easily converted into cash. For example bank deposits, bills of exchange, equity shares etc. Thus, highly liquid assets are referred to as near money.