The problem is not with liquidity or transaction costs. Let's assume for the sake of the argument that you can always buy or sell at the mid price without any a

The problem is not with liquidity or transaction costs. Let's assume for the sake of the argument that you can always buy or sell at the mid price without any additional fees. The reference to "the market's whim with respect to price" means that if you bought $1000 of 10-year treasuries at the beginning of the year and you sell them now you'll get less than $900.