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| Type | Bachelor's Thesis |
| Scope | Discipline-based scholarship |
| Title | Liquidity Premium in Swiss Stocks |
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| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Number of Pages | 44 |
| Date | 2016 |
| Abstract Text | This thesis examines the relation between illiquidity of stocks and their returns. Illiquidity or a lack of liquidity means a weak marketability of a stock. Therefore, an investor who wants to buy or sell an illiquid stock may face difficulties when executing his order for example he might not find a counterparty or has to pay high transaction costs. These difficulties are anticipated and a higher return is demanded. This excess return is called liquidity premium. Firstly, the thesis tries to answer the question if this relationship between illiquidity and return holds in the Swiss stock market and secondly if stock returns can be explained by a liquidity factor. |
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