Which investment has the least liquidity?

A. Property

B. Stocks

C. A savings account

D. A 401k

Answer

The investment with the least liquidity among the options is a 401k. Unlike savings accounts and stocks, a 401k has restrictions that tie up the funds until retirement, making it harder to access. Therefore, the least liquid option is D. A 401k.

Explanation

When it comes to liquidity in investments, liquidity refers to how quickly and easily an asset can be converted into cash without significantly affecting its price. Now, let’s examine each option:

1. Property:

2. Stocks:

3. A savings account:

4. A 401k:

In summary, the 401k investment generally has the least liquidity among the given choices. Investors face challenges accessing funds from a 401k before retirement due to penalties and restrictions, unlike savings accounts, stocks, and property, which tend to offer quicker access to cash.