Definition of liquid asset

Generally, liquid assets are defined as those that can be converted into cash in the short term without losing value and that being goods without delay, they can be transformed into cash. At an economic level, the liquid asset is the one that can be converted or exchanged for money quickly or not lose value when carrying out said conversion.

It is also defined as an asset as it is more or less liquid or if it has a greater degree of liquiditythe faster it makes it possible to transform it into cash.

In addition, different types of assets can be found. The main ones are current assets or current assets, which can be sold as long as they do not generate a negative cost.

As for the liquidity value of an asset, it will depend on the expectation that its owner has about the value that it has in the market. Auto or life insurance, trust funds, or gold cannot be liquid assets as it takes a long time to get a buyer to pay the fair market value of these assets. Also, conversion to liquid assets takes time and is not done immediately.

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