What is liquidity risk?
A)The risk of a decline in the overall stock or bond market
B)The risk of unfavorable business conditions caused by weakness in the overall economy
C)The risk of receiving a lower than market price upon sale of your holding
D)The risk of an unexpected rise in prices that reduces purchasing power
E)None of the above

Question

Quizplus · Accepted Answer

Liquidity risk refers to the possibility of not being able to sell an asset quickly enough to prevent a loss in value. This can result in receiving a lower than market price upon sale of the holding.

What Is Liquidity Risk