how is liquidity of a security is different from its marketability
Dear student
Liquidity is only a characterstic of marketable securities. Liquidity is ability of security to be converted into cash i.e there are buyers and sellers available at the same time. Whereas marketability of secrit means it can be traded at any recognised platform because of its liquidity. A marketable securities must satisfy two conditions.
First,it is readily convertible into cash. Second is that those who purchase marketable securities must intend to convert them when in need of cash.
In other words, a treasury bill purchased with short-term goals in mind is much more marketable than an identical note bought with long-term goals in mind.
Regards.
Liquidity is only a characterstic of marketable securities. Liquidity is ability of security to be converted into cash i.e there are buyers and sellers available at the same time. Whereas marketability of secrit means it can be traded at any recognised platform because of its liquidity. A marketable securities must satisfy two conditions.
First,it is readily convertible into cash. Second is that those who purchase marketable securities must intend to convert them when in need of cash.
In other words, a treasury bill purchased with short-term goals in mind is much more marketable than an identical note bought with long-term goals in mind.
Regards.