Which is NOT a characteristic of cash?

Which is NOT a characteristic of cash?

• A. Durability
• B. Volatility
• C. Portability
• D. Divisibility

Answer: (B)

Cash is generally considered a stable and reliable medium of exchange, and its defining characteristics include durability, portability, and divisibility. Durability refers to the ability of cash to withstand physical wear and tear, allowing it to be used repeatedly without losing value. Portability means that cash can be easily carried and used in transactions, making it convenient for everyday exchanges. Divisibility is the ability to be divided into smaller units, facilitating transactions of varying sizes and allowing for precise payment amounts. Volatility, on the other hand, is not a characteristic of cash. Instead, volatility typically pertains to assets whose values can significantly fluctuate over short periods of time, such as stocks or cryptocurrencies. Cash maintains a stable value, making it a dependable store of value rather than a volatile asset. Therefore, identifying volatility as not being a characteristic of cash aligns with the understanding of cash's reliable nature in financial transactions.

Cash is generally considered a stable and reliable medium of exchange, and its defining characteristics include durability, portability, and divisibility.

Durability refers to the ability of cash to withstand physical wear and tear, allowing it to be used repeatedly without losing value. Portability means that cash can be easily carried and used in transactions, making it convenient for everyday exchanges. Divisibility is the ability to be divided into smaller units, facilitating transactions of varying sizes and allowing for precise payment amounts.

Volatility, on the other hand, is not a characteristic of cash. Instead, volatility typically pertains to assets whose values can significantly fluctuate over short periods of time, such as stocks or cryptocurrencies. Cash maintains a stable value, making it a dependable store of value rather than a volatile asset. Therefore, identifying volatility as not being a characteristic of cash aligns with the understanding of cash's reliable nature in financial transactions.