An Asset Is Liquid If It

question 137

Multiple Choice

An asset is liquid if it

• A) is of intrinsic value.
• B) can be exchanged for other goods and services.
• C) is a store of value.
• D) can be obtained or disposed of without losing much of its nominal value.

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Definitions:

Average Payments

The mean amount paid over a defined period payments.

Average Daily Float

The average amount of uncollected funds represented in checks or other negotiable instruments over a specified period.

Lockbox System

A service provided by banks to accelerate collection of payments by having those payments sent to a special post office box rather than to the company.

Treasury Bills

Represent short-term government securities issued at a discount from the par value and mature without interest payments.