Definition of ‘Liquidity’

 

1. The degree to which an asset or security can be bought or sold in the market without affecting the asset’s price. Liquidity is characterized by a high level of trading activity (số lượng mua bán lớn, mức độ giao dịch cao). Assets that can be easily bought or sold are known as liquid assets.
2. The ability to convert an asset to cash quickly. Also known as “marketability”.
There is no specific liquidity formula; however, liquidity is often calculated by using liquidity ratios.

Investopedia Says

Investopedia explains ‘Liquidity’

1. It is safer to invest in liquid assets than illiquid ones because it is easier for an investor to get his/her money out of the investment.
2. Examples of assets that are easily converted into cash include blue chip and money market securities.

Read more: http://www.investopedia.com/terms/l/liquidity.asp#ixzz1mFWEiqhT


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: