#Liquidity101 Understanding LiquidityLiquidity is the ability to quickly buy or sell an asset without significantly affecting its market price. In finance, liquidity plays a core role, influencing trading efficiency and investment risk. There are two main types: market liquidity (ease of trading assets) and financial liquidity (ability to meet financial obligations). High liquidity helps reduce transaction costs and increases flexibility. Conversely, low liquidity can pose risks, especially during crises. To manage, investors need to consider the liquidity of assets and markets before investing. #Liquidity101