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#Liquidity101

Liquidity 101

Liquidity is a fundamental concept in finance that refers to the ease with which an asset can be converted into cash without significantly affecting its market value. It is crucial for individuals, businesses, and entire financial systems.

Here’s a breakdown of the concept of liquidity:

What is liquidity?

Simply put, liquidity relates to how quickly and efficiently something can be turned into spendable cash.

* High liquidity: assets that can be sold or exchanged quickly for cash at or very close to their market value. Examples include cash itself, money in a checking account, and heavily traded stocks.