#Liquidity101

What is liquidity?

Liquidity refers to how easily and quickly assets can be converted into cash without losing significant value. Cash is the most liquid asset, as it can be used immediately for any purchase or payment.

Types of liquidity:

1. Market liquidity: Refers to how easily an asset (such as stocks or real estate) can be sold in the market without significantly affecting its price.

2. Financial or cash liquidity: Refers to the ability of an individual or company to meet its short-term financial obligations using cash or cash equivalents.