Liquidity risk

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Liquidity risk_____________.

A. is the risk that investment bankers normally face

B. is lower for small OTCEI stocks than for large NSE stocks

C. is the risk associated with secondary market transactions

D. increases whenever interest rates increase.

Answer: Option D

Solution (By Examveda Team)

Liquidity risk increases whenever interest rates increase. Liquidity risk is the risk that a company or bank may be unable to meet short term financial demands.

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