Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include: *

Market liquidity In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quickly purchase or sell an asset without causing a drastic change in the asset's price. Liquidity involves the trade-off between the ...

, the ease with which an asset can be sold * Accounting liquidity, the ability to meet cash obligations when due * Liquid capital, the amount of money that a firm holds *

Liquidity risk Liquidity risk is a financial risk that for a certain period of time a given financial asset, security or commodity cannot be traded quickly enough in the market without impacting the market price. Types Market liquidity – An asset cannot be s ...

, the risk that an asset will have impaired market liquidity

See also