A. is risk investments bankers face
B. is lower for small OTC
C. is risk associated with secondary market transactions
D. increases whenever interest rates increases
✅ The correct answer is option C.
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.
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.