Which of the following factors does NOT indicate market liquidity?
A) number of shareholders
B) high price volatility
C) number of shares outstanding
D) number of shares traded
E) institutional interest

Question

Quizplus · Accepted Answer

High price volatility is not a good indicator of market liquidity. Market liquidity is the ability to buy or sell an asset without significantly affecting its price. Price volatility refers to the tendency of prices to fluctuate rapidly and unpredictably, which can make it difficult to buy or sell an asset at a fair price. Therefore, high price volatility can actually indicate low market liquidity. The other factors listed (number of shareholders, number of shares outstanding, number of shares traded, and institutional interest) are all indicators of market liquidity.

Which of the Following Factors Does NOT Indicate Market Liquidity