Vidyalelo
Management · Q186

International Finance and Treasury

Graduate and Post Graduate · Management · question 186

Q186

Ability of an asset to be converted in to cash very quickly is classified as

A.
variable securities
B.
convertible securities
C.
liquidity
Answer
D.
constant securities

Answer: Option C

Solution

Answer: Option C
Solution:
Ability of an asset to be converted in to cash very quickly is classified as liquidity. Financial liquidity refers to how easily assets can be converted into cash. Assets like stocks and bonds are very liquid since they can be converted to cash within days. However, large assets such as property, plant, and equipment are not as easily converted to cash.