Which of statements a) through d) is FALSE?
A) Home asset bias is an indication of a segmented national market.
B) In completely segmented national markets, the systematic risk of an asset depends on its sensitivity to local market factors.
C) Purchasing power parity holds in segmented financial markets.
D) More than one of the above is false.
E) None of the above are false.

Question

Quizplus · Accepted Answer

Purchasing power parity does not hold in segmented financial markets because there may be differences in prices and inflation rates between different markets, leading to varying exchange rates.

Which of Statements A) Through D) Is FALSE