2. The ability to convert an asset to cash quickly. Also known as "marketability".
There is no specific liquidity formula; however, liquidity is often calculated by using liquidity ratios.
1. It is safer to invest in liquid assets than illiquid ones because it is easier for an investor to get his/her money out of the investment.
2. Examples of assets that are easily converted into cash include blue chip and money market securities.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
liquidity — liq·uid·i·ty /li kwi də tē/ n: the quality or state of being liquid Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. liquidity … Law dictionary
Liquidity — Li*quid i*ty (l[i^]*kw[i^]d [i^]*t[y^]), n. [L. liquiditas, fr. liquidus liquid: cf. F. liquidit[ e].] The state or quality of being liquid. [1913 Webster] [1913 Webster] … The Collaborative International Dictionary of English
liquidity — 1610s, quality of being liquid, from L.L. liquiditatem (nom. liquiditas), from L. liquidus (see LIQUID (Cf. liquid)). Meaning quality of being financially liquid is from 1897 … Etymology dictionary
liquidity — ► NOUN Finance 1) the availability of liquid assets to a market or company. 2) liquid assets … English terms dictionary
liquidity — [li kwid′i tē] n. 1. the quality or state of being liquid 2. Finance a) the ability of a business to meet obligations without disposing of its fixed assets b) the ability of a market to absorb buying and selling without producing undue price… … English World dictionary
liquidity — A market which allows quick and efficient entry or exit at a price close to the last traded price. The ability to liquidate or establish a position quickly is due to a large number of traders willing to buy and sell. The CENTER ONLINE Futures… … Financial and business terms
Liquidity — A market is liquid when it has a high level of trading activity, allowing buying and selling with minimum price disturbance. Also a market characterized by the ability to buy and sell with relative ease. The New York Times Financial Glossary * *… … Financial and business terms
liquidity — [[t]lɪkwɪ̱dɪti[/t]] N UNCOUNT: oft N n In finance, a company s liquidity is the amount of cash or liquid assets it has easily available. [TECHNICAL] The company maintains a high degree of liquidity. ...serious liquidity problems … English dictionary
liquidity — the ability to pay your debts as they fall due Only euphemistic when you lack it: Sir Jeremy came to me saying that he lacked liquidity... that s the delicate way these European aristocrats say in deep shit. (Deighton, 1993/2) A… … How not to say what you mean: A dictionary of euphemisms
liquidity — noun /lɪkˈwɪdəti/ a) The state or property of being liquid. Some stocks are traded so rarely that they lack liquidity. b) An assets property of being able to be sold without affecting its value; the degree to which it can be easily converted into … Wiktionary