Q679
Simplicity with which bondholders and shareholders can change their investments into cash is known
A.
barter
B.
hedging
C.
arbitrage
D.
liquidity
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Simplicity with which bondholders and shareholders can change their investments into cash is known as liquidity. Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market at a price reflecting its intrinsic value. In other words: the ease of converting it to cash.