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liquidity risk

The risk that arises from the difficulty of selling an asset. An investment may sometimes need to be sold quickly. Unfortunately, an insufficient secondary market may prevent the liquidation or limit the funds that can be generated from the asset. Some assets are highly liquid and have low liquidity risk (such as stock of a publicly traded company), while other assets are highly illiquid and have high liquidity risk (such as a house).

Related information about liquidity risk:
  1. Liquidity risk - Wikipedia, the free encyclopedia
    In finance, liquidity risk is the risk that a given security or asset cannot be traded quickly enough in the market to prevent a loss (or make the required profit).
     
  2. Liquidity Risk Definition | Investopedia
    The risk stemming from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimize a loss. Liquidity risk is ...
     
  3. What Is Liquidity Risk? - The Federal Reserve Bank of San ...
    Oct 24, 2008 ... All firms, particularly financial institutions, require access to borrowed funds to carry out their operations, from paying their near-term obligations ...
     
  4. Liquidity Risk - BankersOnline.com
    Liquidity risk is the current and prospective risk to earnings or capital arising from a bank's inability to meet its obligations when they come due without incurring ...
     
  5. Liquidity Risk
    Liquidity risk is financial risk due to uncertain liquidity. An institution might lose liquidity if its credit rating falls, it experiences sudden unexpected cash outflows, ...
     
  6. Asset pricing with liquidity risk - NYU Stern School of Business ...
    Apr 1, 2005 ... Keywords: Liquidity risk; Liquidity-adjusted CAPM; Flight to liquidity; Frictions; ... are affected by liquidity risk and commonality in liquidity.
     
  7. What is liquidity risk? definition and meaning
    Definition of liquidity risk: The risk that arises from the difficulty of selling an asset. ... Some assets are highly liquid and have low liquidity risk (such as stock of a ...
     
  8. Liquidity Risk Definition & Example | InvestingAnswers
    We explain the definition of Liquidity Risk, provide a clear example of how it works and explain why it's an important concept in business, finance & investing.