Which of the following contributes MOST to the marketability of a security?

Question

BlackTom AI · Accepted Answer

Restating the question: Which of the following contributes MOST to the marketability of a security?

Option presented: "D. A large, active secondary market"

Analysis of the option:
- The core idea here is marketability, which refers to how easily a security can be bought or sold without causing a drastic change in its price. A large, active secondary market directly enhances marketability by increasing liquidity: more buyers and sellers, tighter bid-ask spreads, and easier execution at fair prices.
- Why this strengthens marketability: when a security has a broad pool of participants and frequent trading, it is easier to enter or exit positions, and prices tend to reflect information more efficiently. Marketability is largely about the ease of converting to cash, which an active secondary market supports through higher trading volume and lower transaction costs.
- Potential nuances to consider: if there were other options, they might refer to things like strong primary market activity, credit quality, or issuer transparency. However, none of those factors alone surpass the impact of a robust secondary market on liquidity and ease of trading. A security could have excellent fundamentals, but without an active market to trade in, marketability remains limited.
- On possible misconceptions: some students might think that factors like high yield or long-term stability alone guarantee marketability, but without a liquid market, investors may still face difficulty selling quickly or at a fair price.
- Since the provided options list only this one choice, there is no alternative option to compare against. In a real exam scenario, you would weigh all listed factors, but here the emphasis on secondary-market activity is the most direct and powerful contributor to marketability, as it governs liquidity and tradability directly.

Conclusion (inference from reasoning): Given the focus on marketability as liquidity and ease of trade, a large, active secondary market best facilitates these attributes by increasing liquidity, reducing costs, and enabling timely transactions.

33:390:430:90 TREASURY MANAGEMENT Quiz - Chapter 6 - Capital Markets

Which of the following contributes MOST to the marketability of a security?

查看解析

登录即可查看完整答案

类似问题

An important function of secondary markets is to

In contrast to public markets, private markets are characterized by individually negotiated transactions that take place without the aid of a centralized market. Therefore, private markets will generally have:

Which of the following is NOT a correct description of the four dimensions of liquidity:

Newer capital markets are less volatile because they are less liquid. True or False?

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单