In some markets it may take many months to sell a residential property. This is an example of
A) business risk.
B) credit risk.
C) market risk.
D) liquidity risk.

Question

Quizplus · Accepted Answer

This is an example of liquidity risk, which refers to the difficulty of selling an asset without causing a significant movement in its price and being able to convert it to cash quickly. In this context, the difficulty in selling a residential property quickly without potentially having to lower the price significantly is a classic example of liquidity risk.

In Some Markets It May Take Many Months to Sell