An investor must sell a thinly traded, small-issue municipal bond quickly but can only find a buyer at a price well below fair value. This illustrates:

Explanation

When a security trades infrequently, an investor who needs to sell fast may have to accept a much lower price to attract a buyer. That gap between a quick-sale price and fair value is the hallmark of liquidity, or marketability, risk. It is common in small municipal issues, limited partnerships, and other thinly traded assets.