n NISM Certifications
XXI NISM Series XXI-A
Medium

Which of the following best describes 'Liquidity Risk'?

Practice question from NISM XXI A for PMS - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Risk of losing principal due to market fluctuations

  2. Risk that an asset cannot be sold quickly without a significant price change

    Correct answer

  3. C

    Risk of default by the issuer

  4. D

    Risk associated with inflation eroding returns

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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