Question

_ are not very liquid because you cannot take out money whenever you want without paying a penalty; however, the longer the term, the higher the rate will be

Answer 1

When it comes to assets, liquidity means the ease of withdrawing the money you have invested. Assets that are very liquid are the paper assets, in other words cash you deposited. Assets that are not liquid are real estates like buildings, apartments, etc. You cannot easily get its worth unless you already have a buyer.