What defines a non-liquid asset?

A non-liquid asset is defined as an asset that is not easily converted to cash. This means it may take more time, effort, and often additional costs to sell these types of assets compared to liquid assets, which can be quickly sold or converted into cash.

Common examples of non-liquid assets include real estate properties, collectibles, or long-term investments such as stocks that may not have an immediate buyer. These assets can hold value, but their conversion to cash is not instantaneous; they require a sale process that could take time.

In contrast, the other options highlight characteristics of liquid assets or specific types of investments that do not align with the definition of non-liquid assets. Understanding this distinction is crucial for evaluating an individual’s financial situation, especially in lending scenarios where liquidity matters for loan eligibility and payment capability.