It is based on the bond’s marketability and trading frequency; the less frequently the security is traded, the higher the premium

It is based on the bond’s marketability and trading frequency; the less frequently the security is traded, the higher the premium added, thus increasing the interest rate.

Answers

The correct answer is:  liquidity risk premium.

Explanation:

Liquidity risk premium or LP is a type of premium requested by the security's investors when it cannot be converted to cash. The security is considered illiquid in the case the premium is high. Examples of these investments are certificates of deposit, real state, or loans.

answer; operating revenues;

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