Which of the following best describes liquidity in relation to marketable securities?

Liquidity refers to how quickly and easily an asset can be converted into cash without significantly impacting its price. Marketable securities, such as stocks and bonds, are typically considered to be liquid assets because they can be sold in financial markets quickly with minimal transaction costs.

When discussing liquidity, the focus is on the ability to access cash when needed; hence, an asset is said to be liquid if it can be turned into cash within a short timeframe and without substantial loss of value. Other aspects, such as the time it takes to realize profits or the potential for future growth, are not directly related to liquidity. These factors may influence an investor's decision-making but do not define how easily an asset can be converted to cash. Similarly, while there may be a level of risk associated with investments, this is a separate concept from the liquidity of an asset. Therefore, the definition that best captures liquidity in relation to marketable securities is the ease of converting those assets into cash.