Of the Following Assets,the Least Liquid Is

question 31

Multiple Choice

Of the following assets,the least liquid is

• A)stocks.
• B)traveler's checks.
• C)checking deposits.
• D)a house.

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Definitions:

CAPM

The Capital Asset Pricing Model, a model that describes the relationship between systemic risk and expected return for assets, particularly stocks.

Risk-Return Relationship

The principle that potential return increases with an increase in risk, describing the trade-off between the desire for the lowest possible risk and the highest possible return.

APT

Arbitrage Pricing Theory, a model that predicts the expected return of a financial asset based on its sensitivities to macroeconomic factors.

Risk Premiums

The extra return expected by investors for holding a risky investment instead of a risk-free asset.