Liquidity of financial assets

Liquidity refers to how readily an asset can be converted to cash without loss of value. Currency (4) is most liquid as it is already money. Demand deposits (1) are the second most liquid because they can be withdrawn on demand without any notice period. Savings deposits (3) have a slight restriction but remain highly liquid. Time deposits (2) are the least liquid because they have a fixed maturity period and cannot be withdrawn before maturity without penalty. The correct sequence in decreasing order of liquidity is 4-1-3-2. > Liquidity order: Currency > Demand deposits > Savings deposits > Time deposits. Answer: (d).