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Examveda

Bonds that have high liquidity premium are usually have

A. inflated trading

B. default free trading

C. less frequently traded

D. frequently traded

Answer: Option C

Solution(By Examveda Team)

Bonds that have high liquidity premium are usually have less frequently traded. A bond is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments.

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