Which of the Following Best Defines Liquidity

question 158

Multiple Choice

Which of the following best defines liquidity?

• A)It is the ease with which an asset is converted to the medium of exchange.
• B)It is a measurement of the intrinsic value of commodity money.
• C)It is the suitability of an asset to serve as a store of value.
• D)It refers to how many times a dollar changes hands in a given year.

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Definitions:

Compounded Monthly

The process by which interest is calculated on both the principal and the accumulated interest on a monthly basis.

Deferred Annuity

An annuity contract that delays payments until the investor elects to receive them, often at retirement.

Ordinary Annuity

An ordinary annuity consists of identical payments that are made at the conclusion of successive periods for a specified duration.

Deferred Annuity

An annuity contract that delays payments of income, installments or a lump sum until the investor elects to receive them.