What is the definition of Liquidity Preference Theory (LPT)?
- Posted on November 20, 2019
- Financial Terms
- By admin admin
Liquidity Preference Theory (LPT) is a financial theory which suggests investors prefer (and hence will pay a premium) for assets which are very liquid or alternatively will pay less than market value for very illiquid assets. This difference in price between market value and the actual price represents the risk (or lack of it) associated with the liquidity of an asset.
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