Which of the Following Assets Is More Liquid

question 19

Multiple Choice

Which of the following assets is more liquid?

• A)Your car.
• B)Your money in the savings account.
• C)Your money in the chequing account.
• D)Your stock of a company.

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Definitions:

Cash Payback Methods

A capital budgeting technique that estimates the time needed for an investment to generate cash flows to recover its initial cost.

Average Rate of Return

A financial ratio used to estimate the profitability of investments by dividing the average annual profit by the initial investment cost.

Present Values

Refers to the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Capital Investment Proposals

Proposals for significant investments in long-term assets, often analyzed for their potential to generate future profits and cash flows.