Question

which of the following best describes liquidity?
a measure of the availability of cash - like assets
a measure of the credit - worthiness of a business
a measure of the fluctuations in interest rates

Explanation:

In the context of business (specifically finance which is a sub - field of business), liquidity is defined as the ease with which an asset can be converted into cash or the availability of assets that are similar to cash. The second option refers to creditworthiness (related to a business's ability to repay debts), and the third option refers to interest rate volatility, neither of which is the definition of liquidity.

Answer:

a. a measure of the availability of cash - like assets