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Questions and Answers
What is the impact of low liquidity on prices in a market?
What is the impact of low liquidity on prices in a market?
- Prices decrease steadily
- Prices fluctuate greatly (correct)
- Prices remain stable
- Prices increase steadily
Why are prices in a market with low liquidity more volatile?
Why are prices in a market with low liquidity more volatile?
- Due to high transaction volume
- Due to a large number of bids and offers
- Due to stable prices
- Due to low transaction volume (correct)
Which of the following best describes a market with low liquidity?
Which of the following best describes a market with low liquidity?
- A market with a low number of bids and offers (correct)
- A market with a high number of bids and offers
- A market with stable prices
- A market with high transaction volume
Which of the following best describes a thin market?
Which of the following best describes a thin market?
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What is the impact of low liquidity on prices in a thin market?
What is the impact of low liquidity on prices in a thin market?
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Why are prices in a thin market more volatile?
Why are prices in a thin market more volatile?
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