Q24.
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 The correct sequence of these assets in the decreasing order of liquidity is
Answer
D
Explanation
Liquidity of currency is highest. Next will come demand deposits as they have to be cleared when demanded. Next savings deposits, and least liquidity will be of time deposits (fixed deposits with a lock-in period).