Liquid Asset
A liquid asset is an asset that can be quickly converted into cash. Liquid assets are typically held in cash or cash equivalents, such as money market funds, certificates of deposit, and Treasury bills. Liquid assets are important for businesses and individuals because they provide a source of liquidity and can be used to cover short-term expenses or to take advantage of investment opportunities.
History of Liquid Assets
The concept of liquid assets has been around for centuries. In the early days of banking, liquid assets were used to cover short-term expenses and to provide a source of liquidity for businesses and individuals. As banking and financial markets evolved, the concept of liquid assets became more important. Today, liquid assets are an important part of any financial portfolio.
Comparison of Liquid Assets
| Asset | Liquidity | Risk |
|---|---|---|
| Cash | High | Low |
| Money Market Funds | High | Low |
| Certificates of Deposit | High | Low |
| Treasury Bills | High | Low |
Summary
Liquid assets are an important part of any financial portfolio. They provide a source of liquidity and can be used to cover short-term expenses or to take advantage of investment opportunities. For more information about liquid assets, visit websites such as Investopedia, The Balance, and Bankrate.
See Also
- Cash
- Money Market Funds
- Certificates of Deposit
- Treasury Bills
- Liquidity
- Cash Flow
- Asset Allocation
- Investment Portfolio
- Risk Management
- Financial Planning
