Multiple choice

For a small investor in India, which of the following is expected to have a higher level of liquidly?

  1. Equity shares in an unlisted company

  2. Debentures issued by a company

  3. Units of an open-ended MF

  4. Real estate
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Open-ended mutual fund units are the most liquid for small investors because they can be redeemed directly from the mutual fund at any time at the NAV-based price. Equity shares in unlisted companies have no ready market, debentures have limited liquidity, and real estate is highly illiquid requiring time for sale and valuation.

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