When comparing a highly liquidity bond with a comparable but less liquid bond, the highly liquidity bond is most apt to have a lower yield.
What is liquidity bond?
- If you buy individual bonds for their income and plan to hold those bonds to maturity, you haven't given much thought to whether you can sell them if you want to and the cost effectiveness of building your portfolio. maybe.
- This concept is called liquidity.
- In the United States, government bonds, known as government bonds, are currently the most active and liquidity bond market. Treasury Bills (T-Bills) are US Treasury bills backed by the Treasury and have a maturity of one year or less.
- Most bond markets are very illiquid, largely because bonds are highly idiosyncratic.
- Even bonds issued by the same company usually differ in some aspects, such as maturity, coupon rate and covenants.
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