ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Liquidity is the degree to which a security can be quickly purchased or sold in the market at a price reflecting its current value. Liquidity in finance refers to the ease with which a security or an asset can be converted into cashat market price.

Detailed explanation-2: -Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset’s price.

Detailed explanation-3: -An illiquid or non-liquid asset is one that you can’t sell easily. Real estate, works of art and antiques can be difficult to sell for many reasons: often it’s not easy to find a buyer, the asset is very expensive or the process of selling the asset can take a long time.

Detailed explanation-4: -A liquid asset is one that can be quickly sold without a significant loss in value; an illiquid asset is one that can’t be quickly resold without a significant loss in value. For example, holdings in a bank account are liquid assets.

Detailed explanation-5: -Liquid assets refer to cash on hand, cash on bank deposit, and assets that can be quickly and easily converted to cash. The common liquid assets are stock, bonds, certificates of deposit, or shares.