Liquidity risk

Definition:

The risk that arises from the difficulty of selling an asset in a timely manner. It can be thought of as the difference between the "true value" of the asset and the likely price, less commissions.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Graveyard market

Bear market in which investors who sell are faced with substantial losses, while potential investors prefer to stay liquid; that is, to keep their money in cash or cash equivalents until market... Read More

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