The liquidity theory of asset prices – Gordon Pepper

charliesunnucks
Mar 19, 2021
1 min read

The liquidity theory of asset prices explores the belief that at the core of liquidity there is a force which exerts individuals to effect a financial transaction when they would not otherwise do so. Understanding this force of compulsion is a key to understanding a financial market when it appears to be behaving irrationally and avoiding costly mistakes.

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