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practice examMultiple Choice

Practice Exam

Question 1 • CMS 2026-2027 Economics and Personal Finance HONORS INITIAL CREDIT

How easily an investment can be exchanged for cash is known as

Answer
A
return.
B
liquidity.
C
risk.
D
diversification.

Explanation

Liquidity is how easily an investment can be converted into cash. Risk refers to the chance of losing value, return is the gain or loss on an investment, and diversification means spreading investments across different assets.

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