Liquidity refers to how easily an asset can be converted into cash or another asset without significant loss of value. This is important for investors who may need to quickly sell their assets in case of an emergency or a change in market conditions.

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Liquidity Refers to

Question 99

Multiple Choice

Liquidity refers to

A) the ability to purchase a very small share of a company.
B) the ease with which an asset can be converted into a different asset.
C) the number of times a dollar changes hands in the creation of GDP in an economy.
D) the number of shares of stock a corporation issues.
E) the number of bonds a firm has issued.

Correct Answer: