Financial instruments with high information costs
A)will usually be more liquid than similar instruments with low information costs.
B)will have lower yields than U.S. Treasury securities.
C)may not be offered for sale in some states.
D)will have lower prices than similar instruments with low information costs.

Question

Quizplus · Accepted Answer

Financial instruments with high information costs tend to have lower prices than similar instruments with low information costs because investors require a higher return to compensate for the additional risk and effort associated with evaluating the instrument's value, leading to a discount in its price.

Financial Instruments with High Information Costs