Which of the following best defines a liquid asset?

A liquid asset is defined as an asset that can easily be turned into cash without a significant loss in value. This characteristic allows individuals or businesses to quickly access funds when necessary, making these assets crucial for meeting short-term financial obligations. Examples of liquid assets include cash itself, checking accounts, savings accounts, and stocks, which can typically be sold swiftly on the market.

The other options focus on different attributes that do not capture the essence of liquidity. For instance, the first option mentions assets that increase over time, which relates to appreciation rather than liquidity. The third option discusses high value but low liquidity, which actually describes illiquid assets rather than liquid ones. Lastly, the fourth option refers to tangible and physical assets, but liquidity is more about the ease of conversion to cash rather than the asset's physical characteristics. Thus, the best definition aligns with the ability to convert an asset into cash quickly and efficiently.