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Liquidity Premium
(redirected from Liquidity Premiums)

    Also found in: Wikipedia 0.01 sec.
Liquidity premium
Forward rate minus expected future short-term interest rate.
Liquidity Premium
The rate of return that an investor expects above other rates or return in order to make an illiquid investment. All other things being equal, an investor generally expects a higher return for investing in something that may be difficult to convert to cash. For example, an inactive bond may pay a higher coupon rate than an active bond with a similar credit rating.
liquidity premium
The extra return demanded by investors as compensation for holding assets that may be difficult to convert into cash. For example, bonds that seldom trade should offer a higher yield to maturity compared to actively traded bonds of similar maturity and credit risk.
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Investors can capture liquidity premiums without going to the much more painful step of investing in asset classes like private equity or venture capital where capital is required to be locked up for several years.
Roger Ibbotson Named Keynote Speaker for Global Hedge Fund Forum 2010 by PR Newswire
The availability of real-time information about yields and turnover will be beneficial for all investors & corporate issuers, facilitating them to benchmark on their upcoming corporate bonds or funding requirements and reduction in cost of borrowing due to reduced liquidity premiums and wider investor base, he added.
E-Bond Trading Platform to create wider investor base and liquidity ... by The Frontier Star (Northwest Frontier Province, Pakistan)
The availability of real-time information about yields and turnover would be beneficial for all investors & corporate issuers, facilitating them a benchmark on their upcoming corporate bonds or funding requirements and reduction in cost of borrowing due to reduced liquidity premiums and wider investor base, he added.
E-Bond Trading Platform to create wider investor base, liquidity in ... by Balochistan Times (Baluchistan Province, Pakistan)
 
 
 
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