Security markets provide liquidity

Question

Quizplus · Accepted Answer

Security markets provide liquidity by allowing corporations to sell new issues and by creating a market in which investors can easily sell their own investments. This means that investors can easily convert their securities into cash, providing greater flexibility and reducing the risk of holding onto underperforming investments. Additionally, the ability for corporations to sell new issues helps to maintain a supply of available securities, which in turn helps to keep the market liquid.

Security Markets Provide Liquidity