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Jun 27, 2024 · An example of a liquid asset is money market holdings. Money market accounts usually do not have hold restrictions or lockup periods (i.e. you are not permitted to sell holdings for a specific ...
Jul 18, 2024 · Examples of liquid assets include cash, bonds, and CDs. Assets that lack liquidity require time or effort to trade or sell, like real estate or collectibles. You've probably heard the term ...
- Henry Blodget
Jun 27, 2024 · Liquid assets differ from non-liquid assets, which are assets that are difficult and take time to convert into cash without incurring a substantial loss in value. Examples of illiquid assets include real estate, art pieces, jewelry, antiques, cars, private company interests and private equity, over-the-counter stocks, employee stock options, and some types of debt instruments and hedge funds.
What Are Liquid Assets? An asset which can be easily transformed into cash in less time and with no loss or little loss in value is known as a liquid asset. Liquid assets are usually compared with cash as the value remains the same whenever sold. These type of asset is commonly used by businesses and buyers. There are many factors that a liquid ...
- Cash. Includes physical money (local and foreign currency) as well as the savings account and/or current account balances.
- Cash equivalents. Cash equivalents are investment securities with a maturity period not exceeding a year. Examples include treasury bills, treasury bonds, certificates of deposit, and money market funds.
- Marketable securities. Stocks, bonds, and exchange traded funds (ETFs) are examples of marketable securities with a high degree of liquidity. They can be sold easily and it usually takes just a few days to receive the cash from their sale.
- Accounts receivable. Money owed to a business by its customers for goods and services provided makes up accounts receivable. The liquidity of accounts receivable varies.
A liquid asset is cash on hand or an asset other than cash that can be quickly converted into cash at a reasonable price. In other words, a liquid asset can be quickly sold on the market without a significant loss of its value. Generally, liquid assets are traded on well-established markets with a large number of buyers and sellers.
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Non-liquid assets are typically held longer and can provide long-term value. Real estate, for example, can appreciate over time and be an investment that generates monthly income. Similarly, artwork and jewelry may appreciate and provide potential investment returns. Nevertheless, non-liquid assets also come with certain risks.
