Certified Financial Planner (CFP) Practice Exam · Question
Which of the following investment vehicles is most suitable for an investor seeking high liquidity and capital preservation?
Money market funds invest in highly liquid, short-term debt instruments, making them suitable for investors prioritizing liquidity and capital preservation.
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Question: Which of the following investment vehicles is most suitable for an investor seeking high liquidity and capital preservation?
Answer options:
- Growth stocks
- Long-term bonds ✅ Money market funds
- Real estate investment trusts (REITs)
Correct answer: Money market funds
Explanation: Money market funds invest in highly liquid, short-term debt instruments, making them suitable for investors prioritizing liquidity and capital preservation.
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