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1.What is liquidity risk premium? Why does it matter to investors? Do you think the liquidity...

1.What is liquidity risk premium? Why does it matter to investors? Do you think the liquidity risk premium for start-up firms will get larger or smaller as technology advances? Why?

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Liquidity risk premium is nothing but the additional return on bonds which are indeed not actively traded. This indeed matters the increase a lot because illiquid bonds cannot be traded at the market value easily and therefore investors will take a look into this though illiquid bonds pay a premium. When the advancement of technology, the startup company develops and the bonds sale can easily be sold with which, easily one can mention that liquidity risk premium gets snaller with such advances

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