Question

Which of the following statements is most correct? a. A market is transparent when trading is...

Which of the following statements is most correct?

a. A market is transparent when trading is inexpensive.

b. A market is transparent when accurate information is available to all market participants.

c. A transparent market has few regulations.

d. A transparent market has many opportunities for trading on insider information.

e. A market is transparent when everyone knows who the person is that they are trading with.
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Answer #1

Transparency means that the accurate information are available to the market participants so that they can participate based on the information available. Hence option b is correct

TraTransparencynsparency is not related to cost hence option a is wrong

Transparency in the market may be enhanced through regulations. Hence c is not correct

Trading on insider information reduces market transparency. Hence c is wrong

Knowing the person you are trading will not bring transparency. Hence d is wrong

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