Marketability and Liquidity Needs

What this video covers

• The exact exam definition of marketability: how easily a security can be sold in the secondary market without a significant price concession
• Why marketability is purely a property of the security itself, independent of any holder or prospective buyer
• How to rank marketability from most to least: widely held exchange-listed common stock, frequently traded bonds, then restricted securities and private placements with no public secondary market
• The exact exam definition of liquidity need: how soon a customer may need to convert a holding to cash
• Why liquidity need is purely a property of the customer, independent of whatever security sits in the portfolio
• How the test writers bait you into conflating marketability with suitability, and why a restricted security is not automatically unsuitable
• Why identifying a security's marketability is a separate task from deciding whether it belongs in a given customer's account under best-interest and suitability rules