Question

Which of the following asset is having 100 per cent liquid cover?

• A. Balance in SB account
• B. Government Securities
• C. Post Office Savings bank
• D. Balance in current account

Answer 1

Answer:

D. Balance in current account

Balance in current account is treated as 100% liquid because: It is immediately available for withdrawal without any restrictions. Banks can use these funds to meet liquidity requirements at any time. While Government Securities are highly secure and marketable, current account balances are fully liquid on demand, which is why they are sometimes considered to have 100% liquidity cover.