marketability risk


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Liquidity Risk

The risk that an individual or firm will have difficulty selling an asset without incurring a loss. That is, there may be a lack of interest in the market for a particular asset, forcing the owner to sell it for less than its actual value. Liquidity risk may be quantified as the difference between an asset's value and the price at which it can likely be sold. It is highest for lightly traded securities and small issues, as well as during a bear market.

marketability risk

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References in periodicals archive ?
This exposes debt mutual funds to marketability risk.
We then model default risk, along with marketability risk and other characteristics on yield spreads using a factor analytic technique (LISREL).
Our empirical results indicate that both marketability risk and default risk are important in explaining yield spreads for high-yield bonds.
We examine the influence of default risk, marketability risk and convertibility to explain yield spreads for high-yield bonds.
In addition, we find evidence that investors demand compensation for marketability risk, as measured by the volatility of bond prices and trading frequency.