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| Liquidity |
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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.
2. The ability to convert an asset to cash quickly. Also known as "marketability".
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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.
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