How is "Liquidity" defined for REIT investments?

Liquidity in the context of REIT investments refers to how quickly and easily shares of the REIT can be bought or sold in the market without significantly affecting the price. A highly liquid asset allows investors to enter and exit positions seamlessly, which is crucial for making timely investment decisions and managing risk. When shares can be traded swiftly without major price fluctuations, it indicates a healthy market for those shares.

Options discussing profitability, capital raised, or growth rates of property values do not directly address liquidity. Profitability relates to how well the REIT performs financially, capital raised concerns the financial resources available to a REIT, and growth rates focus on changes in property values over time, which are not indicative of how easily shares can be traded in the marketplace. Thus, the definition capturing the essence of liquidity specifically emphasizes the process and ease of trading shares without the influence on their price.