Investors Value Liquidity in an Asset Because

question 5

Multiple Choice

Investors value liquidity in an asset because

• A)liquid assets tend to have high rates of return.
• B)liquid assets incur lower selling costs.
• C)liquid assets incur lower tax liabilities.
• D)whereas liquid assets have high information costs, their low risk offsets this.

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Definitions:

Lease Cost

The expense incurred for renting a property, equipment, or facility under a lease agreement.

Sales Volume

Sales volume refers to the total number of units of a product or service sold by a company within a specific time period.

Units

Standard measurements or quantities used to specify or quantify production, inventory, or sales in business operations.

Property Taxes

Property Taxes are levied by local governments based on the assessed value of property, including land and buildings owned.