According to the liquidity premium theory, investors perceive bonds with level of liquidity risk and thus they require maturities to have a yields on longer term securities. longer; higher; higher shorter; lower; lower shorter; lower; higher None of these are correct. Question 22 10 pts Jerry Seinfeld had to explain what liquidity risk means to depository institutions. If you had to give him advice, you would tell Seinfeld to say that liquidity risk is that promised cash flows from loans and securities held by Fls may not be paid in full. incurred by an FI when the maturities of its assets and liabilities do not match. incurred by an Fl when its investments in technology do not result in cost savings or revenue growth. that a sudden surge in liability withdrawals may require an Fl to liquidate assets quickly at low prices. risk that an FI may not have enough capital to offset a sudden decline in the value of its assets