Consider the following liquid assets : 1. Demand deposits with the banks 2. Time deposits with the banks 3. Savings deposits with the banks 4. Currency What is the correct sequence of these assets in the decreasing order of liquidity is?

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CollectorBabu · Accepted Answer

Correct Answer: 4 &ndash; 1 &ndash; 3 &ndash; 2. Liquidity is a degree to which an asset can be converted to money. It is noted that the most liquid asset is cash or currency as it can always be used easily and fast, so 1 has the highest liquidity. Demand deposit with Bank is an account having more liquidity with easy access in comparison with time deposits, so Demand deposit is less liquid than Currency. Savings deposits with Bank have less liquidity as compared to cash or Demand deposit, so the correct order will be  - 4 &ndash; 1 &ndash; 3 &ndash; 2 Currency- Demand deposits with the banks - Savings deposits with the banks - Time deposits with the banks.

Consider the following liquid assets : 1. Demand deposits with the banks 2. Time deposits with the banks 3. Savings deposits with the banks 4. Currency What is the correct sequence of these assets in the decreasing order of liquidity is?

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