Question Details

	Username: LuckyWoman Rating: Asked to: Jun Wang Date Created: 04 Sep 2015
Category	28
Tag	Financial
Question	Please give the definition of a liquidity cushion.

Advice from Guru

Hello LuckyWoman,

A reserve fund for a company or individual made up of highly liquid investments. A liquidity cushion relates to a business or individual holding an ample amount of cash, or other highly liquid assets, in relation to debt, so that a short-term liquidity crunch or other unexpected event will not lead to potentially disastrous consequences.

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