Accountancy, asked by snegashreeb2019, 9 months ago

Why liquidity is important for investors in money market

Answers

Answered by Ferrari2248
1

Answer:

In a liquid market, a seller will quickly find a buyer without having to cut the price of the asset to make it attractive. And conversely a buyer won't have to pay an increased amount to secure the asset they want.

Explanation:

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Answered by anjanabenson1
0

Answer:

When you’re trading financial markets, liquidity needs to be considered before every position is opened or closed. This is because a lack of liquidity is often associated with increased risk.

If there is volatility on the market, but there are fewer buyers than sellers, it can be more difficult to close your position. In this situation you could risk becoming stuck in a losing position or you might have to go to multiple parties, with different prices, just to fill your order.

Explanation:

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