Questions
COMM_V 298 101 102 103 2025W1 2025W1 COMM 298 Midterm Exam October 17, 2025 - Requires Respondus LockDown Browser
Single choice
Select the correct answer regarding the role of financial markets:
Options
A.There is a high probability that when you trade financial assets, they may be mispriced.
B.There is no competition between dealers in the Bond Market.
C.Financial markets enable the efficient allocation of capital.
D.Financial markets do not allow investors to manage risk, as risk is inherent to financial assets.
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Step-by-Step Analysis
When evaluating the statement about the role of financial markets, it's important to assess each option on its own merits.
Option 1: 'There is a high probability that when you trade financial assets, they may be mispriced.' While mispricing can occur temporarily due to information asymmetries or market frictions, financial markets are designed to facilitate price discove......Login to view full explanationLog in for full answers
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