Final answer:
The term that describes the ability to convert shares into cash quickly is liquidity. Publicly traded companies offer higher liquidity for their shares compared to private companies.
Step-by-step explanation:
The term that describes the ability of people to easily and quickly convert their shares into cash by selling them on the open market is liquidity. Liquidity refers to how easily one can exchange money or financial assets for a good or service, and in the context of shares, it implies the ease with which shares can be sold for cash. This is an important consideration for investors who may seek to access their invested capital promptly or who may need to respond to changing market conditions.
Companies that are publicly traded, where their stock is sold to the public, offer higher liquidity because these stocks are bought and sold on stock exchanges. Such companies have entered the secondary market, which enables original investors to sell their shares to other investors. In contrast, shares of a private company are typically less liquid because they're not readily sold on public markets. Public companies are those that have sold stock to the public, whereas private companies are often owned and operated by a smaller group of individuals.