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Explanation:
Transactions liquidity risk (also known as market liquidity risk) is the risk that an asset cannot be traded quickly enough in the market without significantly impacting the market price. When assets can be liquidated easily without moving the price too much, this risk is considered low.
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Q.3875 There's always a risk that the price of an asset will move adversely in the act of buying or selling it. This risk is low if assets can be liquidated or a position can be covered quickly, cheaply, and without moving the price too much. The risk described here is:
A
Balance sheet risk
B
Transactions liquidity risk
C
Systematic risk
D
funding liquidity risk