Which investment has the least liquidity? mutual fund house checking account corporation

Option D is correct. Investment incorporation has the least liquidity.

Further Explanation:

Liquidity:

Liquidity is the term which tells us about the time duration required to convert the investment into cash as quickly as possible. The investment which has high liquidity, the investor prefers those investment. The investment which has the least liquidity, the investor does not prefer those investment. The investor invest in that type of investment which is providing high liquidity. So that in case of emergency, the investor easily sale his investment and get the money

Justification for the correct and incorrect

A.

Mutual fund: This option is incorrect.

Mutual fund is a type of investment in which a company collect the investment from different investor and pooled all the amount in different companies. The investor easily get back their money in mutual fund. It is highly liquid.

B.

House: This option is incorrect.

House is also a type of investment, in which the investor buys a home by paying a huge amount of money. The investor can easily get back his money after selling the house property. It is also have good liquidity.

C.

Checking account: This option is incorrect.

Checking account is a type of investment in which the investor saves his income in the savings account and opened a checking account. In the checking account the investor has a right to withdraw the savings by using checks. It is highly liquid.

D.

Corporation: This option is correct.

The corporation is not a type of investment. The investor can invest in the corporation, but the investor can get their money after the dissolution of the company and maybe getting the money back after selling the shares of the corporation which takes time. It is the least liquid.

Learn more:

1.Learn more about liquidity account

2.Learn more about savings account

3.Learn more about investment

Answer details:

Grade: Middle School

Subject: Accounting

Chapter: Liquidity of Investment

Keywords:liquidity, investment, corporation, least, mutual fund, converting investment into cash, time duration, liquidity of investment.

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