Question
Select the correct answer. Which investment option is the most illiquid? A. IRAs B. stocks C. mutual funds D. bonds
Answer
4.6
(279 Votes)
Ellis
Elite · Tutor for 8 years
Answer
### A. IRAs
Explanation
## Step1: Define Illiquidity### Illiquidity refers to how quickly an asset can be converted into cash without affecting its price.## Step2: Evaluate Each Option### IRAs (Individual Retirement Accounts) often have penalties and restrictions on withdrawals before retirement age, making them more illiquid.### Stocks can generally be sold on stock exchanges quickly, making them relatively liquid.### Mutual funds can be redeemed at the end of the trading day, providing moderate liquidity.### Bonds can sometimes be sold fairly easily, but their liquidity can vary based on the market.