Asked by Patricia Garcia on May 05, 2024
Verified
Provide an appropriate definition of liquidity premium.
Liquidity Premium
The additional return investors demand for holding a security that is not easily convertible into cash without loss of value.
- Provide definitions and explanations for interest rate risk premium, liquidity premium, and protective covenants.
Verified Answer
ZK
Zybrea KnightMay 08, 2024
Final Answer :
The portion of a nominal interest rate or bond yield that represents compensation for lack of liquidity.
Learning Objectives
- Provide definitions and explanations for interest rate risk premium, liquidity premium, and protective covenants.
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