Which of the following statements is most correct?
a. A market is transparent when trading is inexpensive. |
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b. A market is transparent when accurate information is available to all market participants. |
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c. A transparent market has few regulations. |
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d. A transparent market has many opportunities for trading on insider information. |
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e. A market is transparent when everyone knows who the person is that they are trading with. |
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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