Liquidity refers to the speed with which an asset or security can be bought or sold in the market, without affecting its price—the ease of converting it to ready money, or cash. Cash is considered the most liquid of assets.
 | | Term of the Day | Words to Know | | |  | | Liquidity | | Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. | | Read More » | | Financial Liquidity | | Financial liquidity comes into play for companies, your personal finances, investing, and financial markets. But assets and investments have various levels. | | Read More » | | | Liquid Asset | | A liquid asset is an asset that can easily be converted into cash within a short amount of time. | | Read More » | | | Security | | A security is a fungible, negotiable financial instrument that represents some type of financial value, usually in the form of a stock, bond, or option. | | Read More » | | | Illiquid | | Illiquid is the state of a security or other asset that cannot quickly and easily be sold or exchanged for cash without a substantial loss in value. | | Read More » | | | Cash | | Cash is legal tender or coins that can be used to exchange goods, debt, or services. Cash in its physical form is the simplest, most broadly accepted and reliable form of payment. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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