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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Evaluating the Financial Position of Clients

Which of the following items would be classified as a client's liquid asset when preparing the personal balance sheet?

A savings bank account balance is a liquid asset because it can be used immediately without loss of value. Provident fund balances are retirement assets with withdrawal restrictions, and a self-occupied house or family jewellery are personal-use assets that are not readily convertible into cash.

  1. ASavings bank account balanceCorrect
  2. BEmployee Provident Fund balance
  3. CSelf-occupied residential house
  4. DJewellery held for family use

Explanation

Liquid assets are cash and near-cash items convertible to cash quickly without loss of value, such as bank balances and liquid funds. EPF is a retirement asset with withdrawal restrictions, while the house and jewellery are personal-use assets that are not readily convertible.

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