SIE practice questioneasyLiquidity risk
A security that cannot easily be sold without a significant price concession exposes an investor to:
- ACredit risk
- BLiquidity risk✓ Correct answer
- CMarket risk
- DInflation risk
Explanation
Why B — Liquidity risk
Liquidity risk involves the difficulty of selling an asset promptly at a fair price. Credit and inflation risks relate to other concerns, and market risk involves general price movements.
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