If investors are uncertain that they will be able to sell a corporate bond quickly, the investors will demand a higher yield in the form of a(n) _________________.

A) Inflation premium.
B) Interest rate risk premium.
C) Default risk premium.
D) Liquidity risk premium.
E) Increased real rate of interest.

Liquidity Risk Premium

An additional return that investors demand for holding securities with low liquidity, compensating for the cost associated with the inability to quickly sell the asset.

Corporate Bond

A corporate bond is a debt security issued by a corporation to raise funding, which promises to pay back the principal along with interest at a specified maturity date.

Higher Yield

Refers to investments offering a greater return in terms of interest or dividends, often accompanied by higher risk.