U4 MCQ Test Questions with Answers Graded A+
1. Which of the following is Answer B
true for both stocks and Bonds and stocks are easily converted to cash by selling them in finan-
bonds? cial markets in order to be used as a medium of exchange.
A. They are interest-bear-
ing assets.
B. They are easily con-
verted to cash.
C. They are risk-free as-
sets.
D. They are equity.
E. They are the most liq-
uid form of financial as-
sets.
2. Cash, a house, bonds, Answer D
and a savings account House, bonds, savings account, cash are listed in order from least liquid
are all financial assets. to most liquid.
Which of the following
rankings lists these as-
sets from the least liquid
to the most liquid?
A. Cash, bonds, house,
savings account
B. Bonds, house, savings
account, cash
C. Savings account cash,
bonds, house
D. House, bonds, savings
account, cash
, U4 MCQ Test Questions with Answers Graded A+
E. Cash, savings account,
bonds, house
3. Nathan has been unable Answer E
to trust banks since the Nathan is incorrect because the opportunity cost of holding money is
failure of his savings and the interest income that could have been earned from holding other
loan bank. He claims that financial assets, such as bonds.
storing his hard-earned
money at home is cost-
less. Is Nathan correct?
A. Yes, because money is
the most liquid form of
financial assets.
B. Yes, because there is
no opportunity cost in
holding money.
C. Yes, because the op-
portunity cost of holding
money is the real value of
goods and services it can
purchase.
D. No, because money is
the least liquid form of
financial assets.
E. No, because the op-
portunity cost of holding
money is the lost interest
he could have earned on
other financial assets.
4.
1. Which of the following is Answer B
true for both stocks and Bonds and stocks are easily converted to cash by selling them in finan-
bonds? cial markets in order to be used as a medium of exchange.
A. They are interest-bear-
ing assets.
B. They are easily con-
verted to cash.
C. They are risk-free as-
sets.
D. They are equity.
E. They are the most liq-
uid form of financial as-
sets.
2. Cash, a house, bonds, Answer D
and a savings account House, bonds, savings account, cash are listed in order from least liquid
are all financial assets. to most liquid.
Which of the following
rankings lists these as-
sets from the least liquid
to the most liquid?
A. Cash, bonds, house,
savings account
B. Bonds, house, savings
account, cash
C. Savings account cash,
bonds, house
D. House, bonds, savings
account, cash
, U4 MCQ Test Questions with Answers Graded A+
E. Cash, savings account,
bonds, house
3. Nathan has been unable Answer E
to trust banks since the Nathan is incorrect because the opportunity cost of holding money is
failure of his savings and the interest income that could have been earned from holding other
loan bank. He claims that financial assets, such as bonds.
storing his hard-earned
money at home is cost-
less. Is Nathan correct?
A. Yes, because money is
the most liquid form of
financial assets.
B. Yes, because there is
no opportunity cost in
holding money.
C. Yes, because the op-
portunity cost of holding
money is the real value of
goods and services it can
purchase.
D. No, because money is
the least liquid form of
financial assets.
E. No, because the op-
portunity cost of holding
money is the lost interest
he could have earned on
other financial assets.
4.
