Question

Rank the following from most liquid to least liquid.

1. A. A used 2016 Tesla Model X.

2. B. A rare baseball card sold at a yard sale.

3. C. A stock that sells 1 million shares per day

Answer 1

Rank on the basis of most liquid to least liquid:

1. C. A stock that sells 1 million shares per day is most liquid, as it is able to generate cash more quickly

2. B. A rare baseball card sold at a yard sale is second most liquid, as the amount of money involved is likely less and yard sales can happen easily and effectively

3. A. A used 2016 Tesla Model X is the least liquid, as the amount involved is likely the maximum. Also, it will entail specific buyer which can be difficult to find and hence won't be able to generate cash that quickly.