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liquidity cushion

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Financial Dictionary

Liquidity Cushion

A reserve fund for a company or person containing money market and highly liquid investments.

Investopedia Commentary

This is a cushion used by large and small investors. By maintaining cash reserves in money market instruments, unexpected demands on cash don't require the immediate sale of securities.

Related Links

Diversification Beyond Equities
Basic Investment Objectives

See also: Cash, Liquidity, Liquidity Risk, Money Market

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