Goldman Sachs Interview Question: What is liquidity?... |

Interview Question

Finance Analyst Interview City of London, England

What is liquidity?


Interview Answer

2 Answers


the ability for an asset to be turned into cash. Ex. accounts receivable or money market securities are VERY liquid....While PPE are illiquid.

Sky on 6 Aug 2010

Liquidity can mean a variety of different things depending on the context but in general without loss of generality: If I have an asset worth say; £150,000 then the liquidity of this object would be £150,000 in cash. An example is owning real estate, then selling it.

Liquidity is important in finance as you need the ability to buy assets. That can only occur if you have the cash (the liquidity) to do so.

Anonymous on 10 Feb 2020

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