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Liquidity risk would be greatest for an investor whose portfolio was primarily composed of A) ADRs listed on the NYSE B) municipal bond UITs C) Nasdaq stocks D) municipal bonds
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Liquidity risk would be greatest for an investor whose portfolio was primarily composed of A) ADRs listed on the NYSE B) municipal bond UITs C) Nasdaq stocks D) municipal bonds

User Handrenliang
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Answer: D) municipal bonds

Step-by-step explanation:

Liquidity risk is the risk that an instrument or security can not be easily sold such that actual hard currency can be recuperated.

ADRs on the NYSE can be easily sold and so can NASDAQ stocks. Municipal bond Unit Investment Trust (UITs) can be redeemed in a non-complicated manner so are liquid as well.

Municipal bonds will prove to be the least liquid as the market for municipal bonds is not a heavily traded one.

User Cereal Killer
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