Liquidity risk is the risk that an investor may not be able to sell an investment quickly, efficiently, or at a fair market price. The question specifically describes a limitation on the investor’s ability to sell, which is the defining feature of liquidity risk. An investment may be illiquid because of transfer restrictions, limited secondary-market demand, lack of active buyers, lock-up periods, private placement restrictions, or product structure. When liquidity is limited, the investor may be forced to hold the position longer than intended or accept a reduced price to exit. Market risk is broader and refers to losses caused by general market movements. Political risk involves adverse effects from government action, instability, or policy changes. Prepayment risk applies mainly to mortgage-backed or callable debt instruments when principal is returned earlier than expected. The SIE outline identifies liquidity as a core investment risk and also notes that certain products, such as direct participation programs and hedge funds, are generally illiquid. Reference: Section 2.2 Investment Risks; Section 2.1.6 Direct Participation Programs; Section 2.1.8 Hedge Funds.