What Is Liquidity

question 16

Multiple Choice

What is liquidity?

• A)The ability to convert an asset into cash quickly and at a relatively low transaction cost.
• B)The possibility that you will not be able to find a buyer at the current market price for an asset
• C)The possibility that you will not be able to sell assets without incurring capital gains tax
• D)Both a and b
• E)Both b and c

---

Definitions:

Discount

A reduction in the price of goods or services, typically offered to encourage purchases.

Face Value

the nominal value or original cost of a security as stated by the issuing authority, not necessarily its market value.

Proceeds

The total amount of money received from a sale or transaction.

Discount

A reduction in the price of a product or service, usually to encourage sales or as an allowance for prompt payment.