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13 December, 23:24

An investor who purchases stock in a closely held corporation with a small number of outstanding shares should be MOST concerned about which of the following types of risks? A. ReinvestmentB. RegulatoryC. Interest-rateD. Liquidity

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  1. 14 December, 01:04
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    D) Liquidity

    Explanation:

    A closely held corporation has a limited number of stockholders, that is why their shares are not frequently traded. An advantage of purchasing shares from a publicly traded corporation is that they are traded on a daily basis, and if the investor needs to sell his/her shares, it can be done fairly quickly (they are a fairly liquid investment). On the other hand, since the shares of a closely held corporation are not frequently traded, even though they might be listed on a stock exchange, it may take much longer to sell them which makes them an illiquid investment.
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Home » Business » An investor who purchases stock in a closely held corporation with a small number of outstanding shares should be MOST concerned about which of the following types of risks? A. ReinvestmentB. RegulatoryC. Interest-rateD. Liquidity
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