The concept of liquidity explains to the investors the intensity with which an asset can be quickly bought or sold in the market at a price that reflects its intrinsic value. Cash is mostly recognized as a liquid asset because it can quickly and easily be transformed into other assets.Also, The ability of an asset to be freely transferred with minimal interference from the issuer. Public equity is deemed to be extremely liquid since there are many buyers and sellers, while stock in private companies is generally much less liquid since the buyers and sellers are more limited.
