Practice Test 7

A household holds: currency, a checking deposit, a government bond, and a machine used to produce goods. The household is asked to identify which item is a financial asset that represents a claim on future income in the form of scheduled interest payments. Based on the assets described, which item best fits this description?

A retiree holds: (i) funds in a checking deposit account, (ii) shares of a stock index fund, (iii) a newly purchased government bond, and (iv) a warehouse building that is rented to a firm. Based on the assets described, which asset is typically the most liquid?