Financial Information Analysis
Market liquidity refers to the ease with which an asset can be bought or sold in the market without affecting its price. High liquidity means assets can be quickly exchanged for cash with minimal price fluctuations, while low liquidity indicates that buying or selling the asset can significantly impact its price. This concept is crucial in evaluating how adjustments in equity valuation and assessing credit risk can affect investment decisions and risk management.
congrats on reading the definition of Market Liquidity. now let's actually learn it.