How to Identify the Most Liquid Assets from Grandparents’ Estate

What are the most liquid assets among Jake's grandparents’ marketable assets?

A. his grandparents’ house

B. a municipal bond

C. a government savings bond in his grandparents’ names

D. 100 shares of ABC Corporation common stock

Answer: A municipal bond and 100 shares of ABC Corporation common stock

Identifying the Most Liquid Assets from Grandparents’ Estate

Jake is looking to sell his grandparents’ marketable assets and wants to identify the most liquid ones. When it comes to liquidity, assets that can be quickly converted to cash are crucial. Among the options given, the most liquid assets are:

1. A municipal bond: Municipal bonds are considered relatively liquid assets that can be sold in the secondary market, providing Jake with quick access to cash if needed.

2. 100 shares of ABC Corporation common stock: Common stocks offer high liquidity as they are traded on stock exchanges. Jake can easily sell these shares in the market to access cash promptly.

While both municipal bonds and common stocks are highly liquid, his grandparents’ house and the government savings bond in their names may take longer to convert to cash. Real estate transactions typically involve a lengthier process of finding a buyer, negotiations, and closing, making the house less liquid compared to other options.

It's essential for Jake to consider the liquidity of assets when making financial decisions to ensure he can access funds quickly when needed. By selling the most liquid assets first, he can meet any immediate cash requirements effectively.