Liquidity reflects the ease with which an investor may turn an asset into cash without incurring any fall in its value. In a way, it relates to ability of an asset to be converted into cash during a purchase or sale transaction without adversely influencing its price. From an investment perspective, liquidity defines the convenience with which an asset can be purchased or sold to fulfill emergency cash requirements. Amongst various asset classes available, cash has the highest liquidity. Apart from that, highly-traded stocks also fall in the category of liquid assets because you may find takers of these stocks very easily and sell them conveniently to receive cash.
Financial Terms Like Mutual Fund, IPO and Bond Now In Sign Language For Differently-Abled
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