The order in which the assets are converted into cash. Liquidity is also known as market liquidity. It is another way of saying the word cash. It is an important aspect of businesses and investors.
When it comes to investments, liquidity is important because it allows for access to buyers to provide cash. An investment is liquid if it is in the form of cash. It could also be cash equivalents, such as a holding that is short term or a money market fund. The opposite is that liquid assets would be illiquid..