The sellers of a security than for the buyers

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Reference no: EM131111029

Indicate which of the following statements about liquidity risk is (are) false and explain why:

A. Liquidity risk is more of a concern for the sellers of a security than for the buyers.

B. In general, derivatives can be used to substantially reduce the liquidity risk of a security.

C. Liquidity risk is usually observed in the size of the spread between the bid and ask prices of a security; the less liquid the security, the higher the bid-ask spread.

Reference no: EM131111029

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