Answered

If a savings account is easier to
convert into cash than
common stock, which of the
following best describes a
savings account relative to
common stock?
A. equally liquid
B. negatively liquid
C. less liquid
D. more liquid

Verified Answer :

GinnyAnswer

Final answer:

Liquidity measures the ease of converting an asset to cash. Savings accounts are less liquid compared to common stock.


Explanation:

Liquidity refers to how quickly an asset can be converted to cash with minimal loss in value. Cash is the most liquid asset, followed by cash equivalents like money market mutual funds. A savings account is less liquid relative to common stock since cashing out from it may involve longer processing times.


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