Win 100 Pepe FREE Liquidity refers to how quickly and easily an asset can be converted into cash without significantly affecting its value. Cash is the most liquid asset, while things like property or collectibles are less liquid. In financial markets, liquidity also means how easily securities can be bought or sold at stable prices. High liquidity means smoother trades and lower risk. Businesses need liquidity to cover short-term expenses, while investors seek liquid markets for flexibility. Poor liquidity can lead to delays, higher costs, or financial stress. Understanding liquidity helps in managing risk, investments, and daily financial operations wisely.