Q542
Bonds that have high liquidity premium are usually have
A.
inflated trading
B.
default free trading
C.
less frequently traded
AnswerD.
frequently traded
Answer: Option C
Solution
Answer: Option C
Solution:
Bonds that have high liquidity premium are usually have less frequently traded. A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments.