Mastering Low Liquidity Markets
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Questions and Answers

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?

  • 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?

  • 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?

    <p>A market with a low number of bids and offers</p> Signup and view all the answers

    What is the impact of low liquidity on prices in a thin market?

    <p>Prices are volatile</p> Signup and view all the answers

    Why are prices in a thin market more volatile?

    <p>Due to low transaction volume</p> Signup and view all the answers

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