"Fungibility" refers to the property of a good or asset where individual units are interchangeable and indistinguishable from one another. In other words, if something is fungible, any unit of that thing can be exchanged or substituted for another unit of the same thing without affecting its value or functionality. Here's an example to illustrate fungibility: Imagine you have a note of Rs.10. Now, let's say you want to buy a sandwich that costs Rs. 5. You hand over your Rs. 10 to the cashier, and in return, you receive your sandwich and Rs. 5 in change. In this transaction, it doesn't matter which specific Rs. 5 note the cashier gives you as change. Any Rs. 5 is equally acceptable because all Rs. 5 have the same value and are interchangeable. This demonstrates fungibility—each unit of currency (in this case, the Rs. 5) is identical and can be substituted for any other unit without any difference in value. Similarly, shares of a company traded on a stock exchange are often considered fungible. If you own 100 shares of a company's stock, it doesn't matter which specific 100 shares you own—they are all the same and can be traded or sold interchangeably on the stock market without affecting their value. In summary, fungibility refers to the ease with which units of a good or asset can be exchanged or substituted for one another without impacting their value or utility.

Answer given by Shubhamm Sir at 06-May-2024 07:08 PM