Q759
Liquidity risk is:
A.
is risk investments bankers face
B.
is lower for small OTC
C.
is risk associated with secondary market transactions
AnswerD.
increases whenever interest rates increases
Answer: Option C
Solution
Answer: Option C
Solution:
Liquidity risk is risk associated with secondary market transactions. Liquidity is the ability of a firm, company, or even an individual to pay its debts without suffering catastrophic losses. Conversely, liquidity risk stems from the lack of marketability of an investment that can't be bought or sold quickly enough to prevent or minimize a loss.