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Single choice4)An example of a highly liquid assets is a:Treasury bill (T-bill)High yield bondCommercial real estate property

Question

Single choice4)An example of a highly liquid assets is a:Treasury bill (T-bill)High yield bondCommercial real estate property

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Solution

The correct answer is Treasury bill (T-bill).

Here's why:

  1. 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 cash and securities that can be sold immediately at a stable price.

  2. A Treasury bill (T-bill) is a short-term debt obligation backed by the U.S. government with a maturity of less than one year, making it highly liquid.

  3. High yield bonds, also known as junk bonds, are more risky investments and may not be as easy to sell quickly.

  4. Commercial real estate properties are not considered liquid assets because they can take a significant amount of time to sell, and the sale price may be much lower than the market value.

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