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The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity.

 Assets that can be easily bought or sold are known as liquid assets.

CashInventoriesAccounts ReceivablesCash equivalentsShort-Term InvestmentsPrepaid Expenses

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The technical term for the market's ability to facilitate a sale at the desired price is liquidity.
Liquid assets include most stocks, money market instruments and government bonds. Besides cash, there are other examples such as life insurance policies and investment instruments such as mutual funds, bonds, and money market shares.
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