Liquidity transactions are decisions which managers make with respect to investment and divestment of capital assets (buildings, equipment, business subsidiaries) which may be needed, or are no longer needed.

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Liquidity transactions refer to the management of a company's short-term assets and liabilities to ensure it can meet its immediate financial obligations, not the investment or divestment of long-term capital assets.

Liquidity Transactions Are Decisions Which Managers Make with Respect to Investment