illiquid means not liquid il means not + liquid = illiquid. :-)

yes

liquid assets

Z stocks are not allowed

An illiquid stock is stock in a company that does not trade actively. Because there is not a lot of interest in this stock it makes it hard to trade or sell for cash (liquidate).

Illiquid stocks are not good for a quick trade, and the buy and sell price are normally quite different due to low volume and lack of interest, whereas liquid stocks are traded in much higher volumes, and the buy and sell prices are closer with less spread.