Which of the following is NOT a factor in evaluating asset quality for secondary transactions?

The evaluation of asset quality, particularly in the context of secondary transactions, typically considers several key factors that provide insights into the underlying value and performance of the assets being assessed.

Evaluating historical returns is fundamental as it reflects past performance, allowing investors to gauge the potential future profitability and stability of an asset. Portfolio company valuations are also crucial since they give an indication of the current market perspective on the value of the companies within the portfolio, influencing overall assessment of the asset quality.

Liquidity risks, while more associated with market conditions and the ability to convert assets into cash, still play a role as they affect the stability and attractiveness of an investment, especially in secondary markets where quick access to capital might be prioritized.

In contrast, while the market position of similar firms might provide some context regarding competitive landscape and overall market health, it does not directly influence the quality of the specific assets being evaluated. Asset quality is more inherently tied to the characteristics and performance metrics of the assets themselves, rather than comparative metrics with other market participants. Hence, considering this focus, the market position of similar firms is not a direct factor in the evaluation of asset quality, making it the correct choice in this question.