Chartered Market Technician Practice Exam 2025 – Complete Prep Guide

The concept that refers to the capability of assets to be easily exchanged in the market is liquidity. Liquidity describes how quickly and easily an asset can be bought or sold in the market without affecting its price significantly. High liquidity indicates that there are many buyers and sellers, enabling transactions to occur effortlessly and typically at a stable price.

Fungibility, while closely related, refers specifically to the property of an asset that makes it interchangeable with other individual units of the same asset. For example, one ounce of gold is fungible with another ounce of gold, meaning they are equivalent in value and can be exchanged without any loss. However, this does not necessarily address the ease of trading those assets in the marketplace.

In contrast, market depth relates to the supply and demand for an asset, providing insights into how well an asset can withstand large transactions without excessive price changes. Volatility measures the extent of price fluctuations over time but does not directly address the ease of asset exchange.

Thus, liquidity is the precise term that captures the ability of assets to be readily traded in the market.