Explain Why Some Bond Investors Are Subject to Liquidity Risk

question 73

Essay

Explain why some bond investors are subject to liquidity risk and/or default risk. How does each of these risks affect the yield of a bond?

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Definitions:

Antecedents

Factors or events that precede and are considered to cause or influence an outcome or behavior.

Servant-leadership

A leadership philosophy in which the main goal of the leader is to serve. This is different from traditional leadership where the leader's main focus is the thriving of their company or organizations.

Greenleaf

A reference likely to Robert K. Greenleaf, who promoted the concept of servant leadership.

Continuous Reinforcement

A strategy in which a desired behavior is reinforced every time it occurs, leading to quick learning of the behavior.