Which of the following bank assets is the most liquid?A) consumer loansB) reservesC) state and local government securitiesD) U.S. government securities
Question
Solution 1
The most liquid asset among the options given is B) Reserves.
Here's why:
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Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. The most liquid assets are those that can most quickly be converted to cash.
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