CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

If the financial markets are liquid and the costs of trading are low, the financial system ______
A. has complete markets.
B. is operationally efficient.
C. is informationally efficient.
Explanation: The costs include commissions, bid-ask spreads, and order price impacts. Transaction costs are lower in transparent markets than in opaque markets because traders can more easily determine market value and more easily manage their trading in transparent markets.

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