Which of the following includes liquid assets such as cash and bank deposits?

The correct answer is that liquid assets such as cash and bank deposits are best represented by currency. Currency includes the physical money that is readily accessible for transactions, as well as the balances held in bank accounts that can be immediately withdrawn and used. This characteristic of being readily accessible makes it a key component of liquid assets, which are defined as assets that can quickly be converted into cash without significant loss of value.

When considering the other options, while investments and financial instruments may involve assets that can be liquidated, they are not synonymous with liquidity in the same straightforward manner as currency. Investments typically refer to assets held for purposes of generating returns over time, which may not always be liquid. Financial instruments cover a wide range of products, but many may not be easily converted to cash without a loss in value. Liquid capital, while it could imply readily available funds, doesn't specifically denote cash or immediately accessible bank deposits in the same clear manner as currency does. Thus, the inclusion of cash and bank deposits clearly identifies currency as the appropriate choice.