Which of the following is not a necessary condition of a perfect market?
A)no taxes
B)no information differences among investors
C)no risk
D)no transaction costs

Question

Quizplus · Accepted Answer

While it would be ideal for a market to have no risk, it is not a necessary condition for a perfect market. In fact, risk is a natural aspect of any market and allows for potential profits to be earned by taking on riskier investments. The necessary conditions for a perfect market are no taxes, no information differences among investors, and no transaction costs. No risk is not a necessary condition of a perfect market. In fact, risk is considered a fundamental feature of financial markets and is an important factor that drives investment decisions. The other options, such as no taxes, no information differences among investors, and no transaction costs, are important conditions for a perfect market.

Which of the Following Is Not a Necessary Condition of a Perfect