3. which of the following is a true statement about liquidity?\na. the more liquid an account, the higher…

3. which of the following is a true statement about liquidity?\na. the more liquid an account, the higher the rate of interest offered by the bank.\nb. the only liquid account at a bank is a savings account.\nc. if an account has a high degree of liquidity, it means that the account owner can easily and quickly access the funds in the account.\nd. if someone must have money available for payment of monthly bills, the person should keep that money in an account that has low liquidity.

3. which of the following is a true statement about liquidity?\na. the more liquid an account, the higher the rate of interest offered by the bank.\nb. the only liquid account at a bank is a savings account.\nc. if an account has a high degree of liquidity, it means that the account owner can easily and quickly access the funds in the account.\nd. if someone must have money available for payment of monthly bills, the person should keep that money in an account that has low liquidity.

Answer

Brief Explanations:

  • Option a: More liquid accounts (like checking) usually have lower interest rates than less liquid ones (like CDs), so a is false.
  • Option b: Checking accounts are also liquid, so "only savings" is wrong, b is false.
  • Option c: Liquidity means easy/quick access to funds, so this matches the definition, c is true.
  • Option d: For monthly bills, you need easy access, so a low - liquidity account (hard to access) is bad; should use high - liquidity, d is false.

Answer:

c. If an account has a high degree of liquidity, it means that the account owner can easily and quickly access the funds in the account.