#Liquidity101

**Liquidity 101 (100 words):**

Liquidity refers to how quickly and easily an asset can be converted into cash without significantly affecting its price. Cash is the most liquid asset, while real estate, art, or collectibles are less liquid due to the time and effort needed to sell them. In finance, liquidity is crucial for individuals and businesses to meet short-term obligations. Market liquidity reflects how actively assets are bought and sold in a market. Higher liquidity means lower transaction costs and price stability. Companies and investors monitor liquidity to manage risk, ensuring they have access to funds when needed without incurring losses.