#Liquidity101 Liquidity refers to how easily an asset can be converted into cash without significantly affecting its market price. Think of it like this:

- High liquidity: Assets like cash, stocks, or bonds that can be quickly sold or exchanged for cash without a huge impact on their price.

- Low liquidity: Assets like real estate or collectibles that might take time to sell or exchange, potentially affecting their price.

In finance, liquidity is crucial for investors, companies, and markets. It helps determine how easily assets can be bought or sold, and it can impact prices and risk.

Want to know more about liquidity in a specific context, like investing or business?