Which of the Following Investments Has the Highest Liquidity Risk

question 166

Multiple Choice

Which of the following investments has the highest liquidity risk?

• A) Common stock
• B) Corporate bonds
• C) Treasury bonds
• D) Land
• E) Mutual fund shares

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Definitions:

Work in Process

Inventory items that are partially completed but require further work before they are ready for sale to customers.

Direct Labor Costs

Expenses related to the wages of employees who are directly involved in the production of goods or services.

Fixed Manufacturing Overhead

Manufacturing costs that do not vary with the volume of production, such as building lease payments or salaries of factory supervisors.

Work in Process

Inventory that includes all the materials, labor, and overhead costs for products that are in the production process but not yet complete.