|
|
Liquid asset |
|
|
|
 Home Site Map Add Term Search About Us Contributors |
Liquid assetAsset that is easily and cheaply turned into cash-notably, cash itself and short-term securities.Liquid asset Similar MatchesIlliquidIlliquidIn the context of finance. absence of cash flow needed to fulfill financial debts and meet obligations. In the context of investments, describes a lightly traded investment such as a stock or bond that is not easily converted into cash. Liquidity FundLiquidity FundA California company that buys real estate limited partnership interests at 25% to 35% lower than the current value of the real estate assets. LiquidityLiquidityIn financial markets, 'liquidity' refers to the ease of dealing in a security - whether shares, options, warrants or some other instrument. Another way of looking at it is - how easily can the shares can be bought and sold without significantly moving the price?In general, large companies, with hundreds of millions of shares in issue, and high numbers of shares changing hands every day, have good liquidity. If you are selling or buying a parcel of 5,000 shares in AstraZeneca, for instance, your broker won't have any trouble dealing the order.In contrast, small companies with few shares in issue and thin trading volumes, can have very poor liquidity. If you try to sell 5,000 shares in a small company trading on AIM or OFEX, you may have difficulty actually getting the trade done.Associated with liquidity is the concept of the 'spread' which is the difference between the bid and offer price quoted by market makers. The bid price is what the market maker will pay for your shares if you want to sell them. The offer is the price at which you can buy them from him. Large, liquid, stocks have narrow spreads (a good thing). Small, illiquid, stocks have wide spreads (a bad thing). Liquidation valueLiquidation valueNet amount that could be realized by selling the assets of a firm after paying the debt. Involuntary liquidation preferenceInvoluntary liquidation preferenceA premium that must be paid to preferred or preference stockholders if the issuer of the stock is forced into involuntary liquidation. Further Suggestionsliquidity ratioLiquid yield option note (LYON) Liquidity Liquidity diversification Liquidity trap Accounting liquidity Liquidity crisis Liquidity preference hypothesis Self liquidating loan Liquid voluntary liquidation Liquidating dividend Liquid market liquidator liquidation liquid assets liquid market Liquidated Damages Liquidity premium compulsory liquidation |
|
|
|