Bonds with higher liquidity will demand higher interest rates in the market since they can be easily converted into cash on short notice at or near the fair market value for that bond. True False
A bond is a tool of indebtedness and issued to the holder. The most common are municipal and the corporate bonds and provides the external funds to finance the long terms investments. Since they are highly liquid on the secondary markets and thus they become a type of loan that is long term investment.
