NOCTI Financial and Investment Planning Practice Test

Liquidity is about how easily you can turn assets into cash to cover immediate needs. The best term for cash and assets that can be quickly converted to cash is liquid assets. This category includes cash itself and other items you can sell or access with little delay and minimal loss of value, like certain marketable securities or funds in easily accessible accounts.

Savings is a type of account that holds cash and is fairly liquid, but the phrase describes a broader concept—liquidity across various assets, not just one savings account. Income refers to cash received over time, not the convertibility of existing assets. Personal wealth means your total net worth, not how quickly you can access cash.