1. Which of the following are NOT fungible? 24 carat gold Premium unleaded gasoline Automobiles United Sates $20 Bills
1. Which of the following are NOT fungible?
- 24 carat gold
- Premium unleaded gasoline
- Automobiles
- United Sates $20 Bills
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In order to be considered fungible, an asset must have an agreed-upon value and be interchangeable with other items of similar value. Bitcoin is considered a fungible item because it has a measurable value across currencies, and can be bought and sold for equal value. Moreover, fungible assets can be broken up and sold in fractions, making it easier to exchange for other like-items.
24 carat gold can be exchanged with another 24 carat gold or equivalent market price.
Same can be said for a $20 bill or premium unleaded gasoline.
However Automobiles can be exchanged like that. Although there are thousands of identical models created each year, the price of your automobile is based on mileage, wear-and-tear, as well as any accessories it may have. Thus cannot be considered a fungible item.
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