Questions
Single choice
Which is the most illiquid type of bond?
Options
A.Private Placement
B.Commercial Paper
C.Perpetual Preferred
D.Non-Dollar Bond
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Step-by-Step Analysis
The question asks to identify which option represents the most illiquid type of bond.
Option 1: Private Placement. Private placements are bonds issued to a limited number of accredited investors and not traded on public markets. This lack of a broad, active secondary market makes them significantly less liquid because resale opportunit......Login to view full explanationLog in for full answers
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Similar Questions
A/An ________ in the liquidity of corporate bonds will ________ the price of corporate bonds and ________ the yield on corporate bonds, all else equal.
Part 1What will happen in the bond market if the government imposes a limit on the amount of daily transactions? Which characteristic of an asset would be affected? A. Riskiness of bonds relative to other assets will decrease, increasing the interest rate and increasing bond's prices. B. Liquidity of bonds relative to other assets will increase, decreasing the interest rate and lowering bond's prices. C. Liquidity of bonds relative to other assets will decrease, increasing the interest rate and lowering bond's prices. D. Riskiness of bonds relative to other assets will increase, decreasing the interest rate and increasing bond's prices.
Part 1What will happen in the bond market if the government imposes a limit on the amount of daily transactions? Which characteristic of an asset would be affected? A. Liquidity of bonds relative to other assets will decrease, increasing the interest rate and lowering bond's prices. B. Riskiness of bonds relative to other assets will increase, decreasing the interest rate and increasing bond's prices. C. Riskiness of bonds relative to other assets will decrease, increasing the interest rate and increasing bond's prices. D. Liquidity of bonds relative to other assets will increase, decreasing the interest rate and lowering bond's prices.
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