rate the following bank accounts from most to least liquid: cd, savings account, checking account, money…
rate the following bank accounts from most to least liquid: cd, savings account, checking account, money market account. a. cd, savings account, checking account, money market account b. savings account, checking account, cd, money market account c. cd, money market account, savings account, checking account d. checking account, savings account, money market account, cd please select the best answer from the choices provided
Answer
Answer:
D. Checking account, savings account, money market account, CD
Explanation:
Step1: Understand liquidity concept
Liquidity is the ease of converting an asset to cash.
Step2: Analyze checking account
It allows easy access to funds via checks, debit - cards, etc., so it's most liquid.
Step3: Analyze savings account
It's also easy to withdraw from, but may have some limits, less liquid than checking.
Step4: Analyze money market account
It has some restrictions like minimum balance and transaction limits, less liquid than savings.
Step5: Analyze CD
A CD (Certificate of Deposit) has a fixed term, and early withdrawal usually incurs penalties, making it least liquid.