Financial markets are not frictionless because of:
A) Commissions charged by brokers.
B) Bid-ask spreads charged by dealers.
C) Trading restrictions.
D) Costs of acquiring information about financial assets.
E) All of the above.

Question

Quizplus · Accepted Answer

Financial markets are not frictionless due to various costs and restrictions involved in trading, including commissions charged by brokers, bid-ask spreads, trading restrictions, and the costs of acquiring information about financial assets. These factors all contribute to the frictions encountered in financial markets.

Financial Markets Are Not Frictionless Because Of