As a measure of "liquidity",

Question

Quizplus · Accepted Answer

Liquidity refers to the ease with which a financial asset can be bought or sold in the market without affecting its price. A higher turnover (i.e. the number of shares traded) implies that the market has more buyers and sellers, increasing the likelihood of a transaction at a fair price, hence indicating greater liquidity. Conversely, a low turnover implies a lack of market participants or investors being unwilling to buy/sell at the prevailing price, which poses a challenge to liquidate the assets, reducing liquidity. Therefore, B is the best choice. Option A is incorrect as lower turnover implies a lack of liquidity. Option C is unrelated and incorrect.

As a Measure of "Liquidity