You want to buy a new sports coupe for \$79,500. If you decide to invest in marketable securities to save for this purchase, which of the following best describes a marketable security?

• A. A long-term investment in real estate properties.
• B. A collectible item such as rare coins or artwork.
• C. A non-transferable certificate of deposit held for more than 10 years.
• D. A short-term, highly liquid investment that can be easily converted to cash with minimal risk of value change.

Answer: (D)

Verified step by step guidance

1. Understand the concept of marketable securities: Marketable securities are short-term investments that are highly liquid, meaning they can be quickly converted into cash with minimal risk of losing value.
2. Compare the options provided in the problem: Evaluate each option to determine whether it aligns with the definition of marketable securities.
3. Option 1: A long-term investment in real estate properties. Real estate is not considered a marketable security because it is not highly liquid and cannot be easily converted to cash.
4. Option 2: A collectible item such as rare coins or artwork. Collectibles are not marketable securities because their value can fluctuate significantly, and they are not easily liquidated.
5. Option 3: A non-transferable certificate of deposit held for more than 10 years. This is not a marketable security because it is non-transferable and held for a long-term period, which does not meet the criteria of high liquidity and short-term investment.