Answer: Transactions liquidity risk

## Explanation **Transactions liquidity risk** refers to the risk that the act of buying or selling an asset will move its price adversely. This risk is characterized by: - **Adverse price movement** during trading activities - **Low risk** when assets can be liquidated quickly, cheaply, and without significant price impact - **High risk** when large positions need to be unwound in illiquid markets **Balance sheet risk**, on the other hand, refers to broader liquidity concerns related to a firm's overall financial structure and ability to meet obligations, rather than the specific price impact of individual transactions. The definition provided in the question perfectly matches **transactions liquidity risk**, as it specifically describes the risk of moving asset prices during the execution of trades, which is minimized when liquidation can occur efficiently without substantial price disruption.

Author: LeetQuiz .