What is liquidity?
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Liquidity means how quickly you can get your hands on your cash. In simpler terms, liquidity is to get your money whenever you need it. ... Cash, savings account, checkable account are liquid assets because they can be easily converted into cash as and when required.
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In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Liquidity involves the trade-off between the price at which an asset can be sold, and how quickly it can be sold.
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