Mutual funds pool money from investors to purchase securities. Main types include money market, bond, stock, and hybrid funds. Open-end funds trade daily at net asset value. Unit investment trusts (UITs) trade once at creation
Asset is any resource owned or controlled by a business. Assets represent value that can be converted into cash. Assets are recorded on balance sheet under monetary value
CCE are most liquid current assets on business balance sheets. Investments with maturity of 90 days or less qualify as CCE. Equity investments are generally excluded unless they are essentially CCE
Liquidity measures how easily assets can be converted into cash. More liquid assets are easier to buy and sell without significant price impact. Gold bars are more liquid than rare collectible books
Bid and ask represents highest buyer's and lowest seller's prices for securities. Bid price is first, ask price is second in quotation. Difference between bid and ask prices indicates security's liquidity
Working capital is the difference between current assets and current liabilities. Calculated by subtracting current liabilities from current assets. Positive working capital indicates sufficient resources for operations. Negative working capital suggests potential liquidity issues