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3 years ago

Define liquidity risk and explain how it relates to bonds and bond yields.

Business

1 answer:

nadya68 [22]3 years ago

5 0

Answer:

Liquidity risk is the inability to quickly sell a bond for its full value. This risk exists primarily in thinly traded issues. Default risk is the likelihood the issuer will default on its bond obligations and is the basis for bond ratings.

Liquidity is a prime determiner of yield spreads, explaining up to half of the cross-sectional variation in spread levels and up to two times the cross-sectional variation in spread changes that is explained by the effects of credit rating alone.

Liquidity risk Liquidity refers to the investor's ability to sell a bond quickly and at an efficient price, as reflected in the bid-ask spread. High-yield bonds can sometimes be less liquid than investment-grade bonds, depending on the issuer and the market conditions at any given time.

(If some parts overlap/relate to the exactly to other parts, I'm sorry. But there ya go !)

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Answer:

Nash Rental Agency

The Journal General

Adjusting Entries

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Accumulated Depreciation $ 1848 Cr.

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3 years ago

The following chart describes opportunities and challenges in the external environments that surround businesses. Which of the f

Sidana [21]

Answer:

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Explanation:

Database present cannot be a challenge in the context of the global environment. Therefore, it is incorrect.

E-commerce, by no means, is a costly technology. It is a cost-effective technology. Therefore, it is also incorrect.

Identify theft is a challenge but war and terrorism cannot satisfy the global environment. So, it is wrong.

Identify theft is a challenge while green living presents opportunities for new businesses in the global environment. Therefore, it is the correct option.

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Best bet would be Law of Supply. *

Considering you did not give any options.

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