Which of the following is NOT one of the three main types of liquidity?

Prepare for the Evercore Liquidity Test with engaging quizzes, flashcards, and hints. Each question offers detailed explanations to enhance your understanding and boost your confidence for a successful exam outcome!

The identification of "Political liquidity" as not being one of the three main types of liquidity is accurate. The three recognized types of liquidity are asset liquidity, market liquidity, and funding liquidity.

Asset liquidity refers to how easily an asset can be converted into cash without affecting its market price. Cash and cash equivalents are considered the most liquid assets, while real estate or collectibles are less so.

Market liquidity describes the ability to quickly buy or sell assets in the market without causing a significant impact on their price. It reflects the depth of the market and the presence of willing buyers and sellers at any given time.

Funding liquidity pertains to the ease with which an entity can obtain cash or liquid funds to meet its obligations. This type of liquidity is crucial for businesses and individuals to keep operations running smoothly and to manage cash flow effectively.

Political liquidity, however, is not a standard category for discussing liquidity in financial context. It doesn't fit into the framework of asset management, investment trading, or financial stability measures typically associated with liquidity assessments.

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