Question

Which of the following is the least liquid asset?

		gold
		shares of stock on the New York Stock Exchange
		your car
		government bonds

Answer 1

The least liquid asset is the car. This is because liquidity refers to the ability of an asset to be converted into cash. It is the extent to which an asset can be bought or sold quickly without affecting the asset's price. An asset that can be sold rapidly for its full value is said to be highly liquid.

Gold is the highly liquid asset. It can easily converted into cash in its full value.

Similarly, stock market is highly liquid because of its trading volume. Similarly, government bonds are also liquid. For instance, the US government bond market is also very liquid.