ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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.

Detailed explanation-2: -Cash is the most liquid asset followed by cash equivalents, which are things like money markets, 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.

Detailed explanation-3: -Checking accounts is the most liquid as you can withdraw money whenever an account holder wants. There is no limitation on money taken out of the account. So, it is the most liquid near to cash.

Detailed explanation-4: -For example, the money in your checking account, savings account, or money market account is considered liquid because it can be withdrawn easily to settle liabilities.

Detailed explanation-5: -Examples of liquid assets Can also include foreign currency. Checking accounts: Because checking accounts generally don’t limit the number of withdrawals you can make and allow check writing, online bill pay and debit cards, this is the most liquid of all deposit accounts.