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Liquidity refers to how quickly and easily an asset can be converted into cash without significantly affecting its price. High liquidity means that an asset can be sold quickly with minimal price fluctuations, such as stocks or government bonds. In contrast, low liquidity applies to assets that are harder to sell, like real estate or collectibles, which may require more time and effort to convert into cash. Liquidity is an important concept in finance, impacting investment strategies and market stability.

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1mo ago

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