n NISM Certifications
X NISM Series X
Medium

What is an 'Impact Cost' with reference to the equities market?

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    The percentage price movement due to a particular trade

  2. B

    The risk of trading in stocks that are not liquid

  3. C

    The measure of liquidity risk

  4. All of the above

    Correct answer

Why this is the answer

Impact cost measures liquidity risk and reflects how much a trade moves the stock price.

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