An Individual Wanting the Most Liquid Asset Possible Will Hold

question 431

Multiple Choice

An individual wanting the most liquid asset possible will hold

• A) currency.
• B) a savings account.
• C) U.S. government bonds.
• D) gold.

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Definitions:

Opportunity Cost

The value of the next best alternative foregone as the result of making a decision.

Social Security Trust Fund

A governmental fund that collects payroll taxes to provide retirement, disability, and survivors' benefits.

Federal Government

The national government of a federation, responsible for national affairs, distinct from state or local governments.

Bonds

Fixed-income securities that represent loans made by investors to borrowers, typically corporate or governmental, which pay interest over a defined period and return the principal at maturity.