We use lattice-Boltzmann and analytical calculations to investigate transient hydrodynamic finite-size effects induced by the use of periodic boundary conditions. These effects are inevitable in simulations at the molecular, mesoscopic, or continuum levels of description. We analyze the transient response to a local perturbation in the fluid and obtain the local velocity correlation function via linear response theory. This approach is validated by comparing the finite-size effects on the steady-state velocity with the known results for the diffusion coefficient. We next investigate the full time dependence of the local velocity autocorrelation function. We find at long times a crossover between the expected t^{-3/2} hydrodynamic tail and an oscillatory exponential decay, and study the scaling with the system size of the crossover time, exponential rate and amplitude, and oscillation frequency. We interpret these results from the analytic solution of the compressible Navier-Stokes equation for the slowest modes, which are set by the system size. The present work not only provides a comprehensive analysis of hydrodynamic finite-size effects in bulk fluids, which arise regardless of the level of description and simulation algorithm, but also establishes the lattice-Boltzmann method as a suitable tool to investigate such effects in general.