Thinly traded securities have a greater inherent risk related to valuation.

Question

Quizplus · Accepted Answer

Thinly traded securities have low trading volumes, which means there are fewer buyers and sellers in the market. This can make it difficult to determine the fair market value of the security, which increases the risk related to valuation. As a result, investors may experience increased volatility and potential losses when investing in thinly traded securities.

Thinly Traded Securities Have a Greater Inherent Risk Related to Valuation