What is liquidity?

Question

Rank the following assets in order of their liquidity: $10 bill, personal check for $20, savings account with $400 in it, stereo, car, house, travelers’ check.

Answer 1

Liquidity the ability to be converted into cash.

So in order of liquidity:

$10 bill (already cash)

savings account with $400 in it

travelers' check

person check for $20

stereo

car

house

Answer 2

Ok well Liquidity just means that when you are selling something it has the minimum loss of value. So cash would have the most liquidity, then a house because houses appreciate in value, then a savings account because it also appreciates because of interest.
Vehicles depreciate very fast (especially after 10 years)
Stereo would probably have the least of all of the items.
Personal checks usually don't have a "void after __days" so they would be stable and a travelers' check could appreciate in value if you are going somewhere that 1 American dollar is worth more.
I hope I helped you at least a little bit... Good luck :)

Answer 3

1)$10 bill
2) travelers’ check
3) savings account with $400 in it
4) personal check for $20
5) stereo, car, house.

I put the traveler's check before the savings account because it is similar to cash on hand, while the savings account needs to be accessed in order to obtain the cash.

The $10 bill is actual cash, so it comes first. The personal check isn't always recognized or accepted as payment, nor are the funds received from it as immediate as those of a traveler's check (if they are received at all, as some personal checks are written with insufficient funds), so I placed that as fourth. All of the material goods I placed fifth in the order in which they might be sold the quickest.

It's funny that those with degrees in economics state otherwise.

Answer 4

Liquidity is a measure of how convertible a particular asset is into cash--how immediately exchangeable it is. In this case the $10 is immediately exchangeable, next comes the check, next comes the travelers check, then the bank account because you would have to go to the bank and do a transaction to actually get the money, then the stereo because it could probably be sold in an hour or two, then the car because that would take a little longer to sell--like a few hours (title, insurance issues), and finally the house because houses take a long time to sell and people need to get financing to arrange to pay for it.

Answer 5

I think liquidity has something to do with items that are easily able to converted into cash.

House would be Last
so,


Savings account -1

personal cheque
traveler's cheque

stero
car
house

I'm not sure about bill - because bill is an expense. The rest are consider ASSETS - current and non-current.

Answer 6

Liquidity is the provision or bypass of a commodity, which may be money or different asset. no count number if it particularly is constrained, then there's no longer sufficient of it (like now) Bit like a river, quite. Water, being liquid, flows. If it includes a barrier or dam it stops. the different fringe of the barrier will become a drought or constrained liquidity.the comparable volume of water is there in spite of the undeniable fact that it is not getting by way of. of course there might desire to be a number of contexts; business enterprise money bypass, credit crunch, loss of share availibility. greater advantageous answer from Andrew W--nicely completed!

Answer 7

Liquidity = Versatility

in decsending order

Travelers check (if blank)
House (if owned)
car (if owned)
400$ Savings account
stereo
20$ Personal check
10$ bill

The stereo house and car depends on your ability to sell.... This is the in decsending order according to me (i have a pretty nice stereo system)

Answer 8

Liquidity is the ease that an asset can be turned into cash.... in this case:
most liquid>
$10 bill
savings account
traveler's check
personal check
stereo
car
house
least liquid>

Answer 9

refers to an asset's ability to be EASILY converted through an act of buying or selling without causing a significant movement in the price and with minimum loss of value.

Answer 10

be more explicit their are alot of types more information please