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CAPITAL MARKET

Liquidity

  • LIQUIDITY RATIOS

    There are thow methods for measuring stock market liquidity

    (A) TURNOVER RATIO

    (B) VALUE TRADED RATIO

  • LIQUIDITY

    Liquidity is one of the most important indicators, that greatly influences stock market development and efficiency. It is one of the factors affecting the price discovery mechanism. A market is considered to be liquid when large volume of trades can take place without any significant effects on price. When an investor is able to transact at a price close to the current market price in the stock market, the market is liquid.

  • TOOLS FOR MANAGING LIQUIDITY IN THE MONEY MARKET

    There are five main tools for managing liquidity in the money market and they are:

    (A) RESERVE REQUIREMENTS

    (B) INTEREST RATES

  • LIQUIDITY MANAGEMENT

    Effective liquidity management will enable an organisation to derive maximum benefits at minimal cost. Effective cash optimisation is critical to all organizations, especially in a tough economy. Cash is the lifeblood of organisations. An organisation having a proper set of liquidity management policies and procedures will improve profits, reduce the risk of corporate failure