The market liquidity of a security can be measured using
A) Trading turnover.
B) Bid-Ask spread.
C) Price of the security.
D) Choices a and b.
E) Choices b and c.

Question

Quizplus · Accepted Answer

Both trading turnover and bid-ask spread are indicators of market liquidity. The trading turnover measures the volume of trades, while bid-ask spread reflects the difference between the prices at which buyers are willing to buy and sellers are willing to sell. Therefore, options A and B are both correct, making option D the best answer. Option C, the price of the security, is not a direct measure of market liquidity. Option E is incorrect because option C is not a correct choice.

The Market Liquidity of a Security Can Be Measured Using