The liquidity status of certificate of deposit which is more negotiable is considered as __________?
Correct answer: C. more liquid
- A. certified liquidity
- B. term liquidity
- C. more liquid
- D. less liquid
Explanation
A negotiable certificate of deposit can be sold in the secondary market, so greater negotiability gives it greater liquidity. Therefore, it is considered more liquid than a non-negotiable deposit certificate.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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