Finance · Financial Markets
Which of the following represents a primary risk factor associated with merchant banking activities due to their involvement in venture capital and equity investments?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Liquidity risk being completely absent due to listed corporate assets.
- 2High capital risk and illiquidity inherent in early-stage and unlisted equity investments.✓
- 3Zero risk profile because all corporate investments are mandated to have government guarantees.
- 4Default risk restricted entirely to sovereign government securities.
Correct answer
High capital risk and illiquidity inherent in early-stage and unlisted equity investments.
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