Asset Liquidity Risk

Asset liquidity risk refers to the potential difficulty an individual or organization may face when trying to sell an asset quickly without significantly lowering its price. In simpler terms, it’s the risk that you might not be able to find a buyer for something you own, like stocks or real estate, when you need cash. If the market for that asset is not active, it could take time to sell it, or you might have to accept a lower price. Managing this risk is important for financial stability and cash flow planning.