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Liquidity

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Liquidity
The ability to convert an investment into Cash with minimum capital loss.
    
A stock, Bond or commodity that has a great many units outstanding has liquidity and investors are therefore more inclined to seek out liquid investments so that their trading activity Will not influence the market price. Investment funds are thought to be highly liquid as they allow for purchases and redemption's on a daily Basis. Liquidity refers to that quality of a business which enables it to meet its payment obligations, in terms of possessing sufficient liquid assets; and to such assets themselves. The liquidity of a product can be measured as how often it is bought and sold; this is known as Volume. Often investments in liquid markets such as the stock Exchange or futures markets are considered to be more liquid than investments such as Real Estate, based on their ability to be converted quickly.
Posted by  Privatebanking.com
 
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