Liquidity refers to the ease with which assets can be converted to cash in the normal course of business.

Question

Quizplus · Accepted Answer

Liquidity is defined as the degree to which an asset or security can be quickly and easily bought or sold in the market, without affecting its price. Thus higher liquidity indicates a more active, fluid, and efficient market, where buyers and sellers can trade more easily and at lower transaction costs.

Liquidity Refers to the Ease with Which Assets Can Be