NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Evaluating the Financial Position of Clients
In the personal financial statements of a client, which of the following is correctly classified as a liquid asset?
A savings bank account balance is a liquid asset because it can be used immediately at its full value. A self-occupied house, a PPF balance under lock-in and jewellery for personal use cannot be turned into cash quickly without delay or loss.
- ABalance in a savings bank accountCorrect
- BSelf-occupied residential flat
- CPublic Provident Fund balance locked in for 15 years
- DJewellery kept for family use
Explanation
Liquid assets are those that can be converted to cash quickly with little or no loss of value. A savings account balance meets this test. A house, locked-in PPF balance and family jewellery are not readily convertible without cost or delay.
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