What risk does the bid-ask spread mostclosely meas
What risk does the bid-ask spread mostclosely measure:
A.Liquidity risk.
B.Credit spread risk.
C.Inflation risk.
参考解答
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2024-11-14 21:01:13
Ans:A;
A is correct. Liquidity risk is the risk that the investor will have to sell a bond below its indicated value. The size of the spread between the bid price and the ask price is the primary measure of liquidity of the issue. If trading activity in a particular security declines, the bid-ask spread will widen, and the issue is considered less liquid.
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