In financial terms, what is meant by 'liquid assets'?

Liquid assets refer to those assets that can be quickly converted into cash without a significant loss in value. This characteristic is crucial for individuals and businesses, as it provides the flexibility to access funds when needed without delay or the need for substantial market intervention. Common examples of liquid assets include cash itself, bank deposits, and certain marketable securities such as stocks and bonds.

When assessing the other options, they represent concepts that do not align with the definition of liquid assets. Assets that cannot be easily sold would be considered illiquid and thus do not provide the immediate cash access that characterizes liquid assets. Long-term investments typically involve assets held over a more extended period and often require time to sell, which again does not fit the definition. Lastly, while physical property can have value, it is generally not as readily convertible to cash as other types of assets, making it less liquid. Hence, the accurate definition is that liquid assets can be quickly converted to cash.