n NISM Certifications
XXI NISM Series XXI-A
Medium

Calculate the Liquidity Risk Cost of the portfolio.

Practice question from NISM XXI A for PMS - Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Rs. 285,000

  2. B

    Rs. 210,000

  3. Rs. 142,500

    Correct answer

  4. D

    Rs. 325,000

Why this is the answer

Liquidity risk cost is calculated based on bid-ask spreads and proportional holdings. The average of Rs. 135,000 and Rs. 150,000 gives Rs. 142,500.

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