The Ease with Which a Security Can Be Sold and Converted

question 13

Multiple Choice

The ease with which a security can be sold and converted into cash is called:

• A) convertibility.
• B) liquidity.
• C) marketability.
• D) none of the above.

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Definitions:

Exit Value

The estimated amount that an asset or investment could be sold for at the end of its useful life.

Economic Resource

Assets or inputs that have the potential to contribute to the production of goods and services, providing economic benefit to businesses or individuals.

Asset

Resources owned or controlled by a business, projected to bring future economic benefits.

Measurement Alternative

An accounting option that allows entities to measure certain investments at cost, minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.