An Asset's Liquidity Depends Upon

question 12

Multiple Choice

An asset's liquidity depends upon

• A) the absolute size of its value and how long it takes to sell the asset at market value.
• B) how long it takes to sell the asset at market value and the costs of selling the asset.
• C) the costs of selling the asset and the fraction of its value that can be obtained if it is sold immediately.
• D) the fraction of its value that can be obtained if it is sold immediately and the absolute size of its value.
• E) the value of the asset at time of sale and the costs of selling the asset.

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Definitions:

Interest Earned

The amount of money gained on an investment or savings account over time due to applied interest rates.

Interest Rate

The percentage at which interest is paid by borrowers for the use of money that they borrow from a lender.

Maturity Value

The amount that will be received at the end of a fixed income investment period, such as bonds or certificates of deposit.

Invested

The process of investing funds or capital into a project anticipating the generation of extra income or gains.