ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The correct answer is option B) Liquidity. Liquidity is the relative ease and speed with which an asset can be converted into a medium of exchange. Assets such as cash and accounts receivable are considered more liquid than the assets such as inventory and equipment.

Detailed explanation-2: -Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price.

Detailed explanation-3: -Financial liquidity refers to how easily assets can be converted to ready cash without affecting its market price. Assets like stocks and bonds are very liquid and can be converted into cash within days.

Detailed explanation-4: -Liquidity describes your ability to exchange an asset for cash. The easier it is to convert an asset into cash, the more liquid it is. And cash is generally considered the most liquid asset. Cash in a bank account or credit union account can be accessed quickly and easily, via a bank transfer or an ATM withdrawal.

Detailed explanation-5: -Liquidity is the ease with which an asset can be converted into a medium of exchange.