The expenses involved in actually putting together and executing a deal are called _____.

Question

BlackTom AI · Accepted Answer

Start by restating what the question is asking in plain terms: identify the term for the expenses involved in actually assembling and carrying out a deal.
Option 1: physical assets. This term refers to tangible items like property or equipment. It does not capture the idea of costs incurred to negotiate, structure, or close a deal, so it is not the right fit for the described expenses.
Option 2: financial risks. Financial risks describe potential losses or uncertainties associated with an investment or deal, not the explicit costs of putting the deal together. While related to deal activity, this term describes a different concept entirely.
Option 3: liquidity costs. Liquidity costs relate to the cost of converting assets into cash or the impact of market frictions on trading, rather than the direct expenses of executing a deal. It’s about market liquidity, not deal assembly expenses.
Option 4: transaction costs. This phrase specifically encompasses the costs incurred in the process of trading or completing a deal, including fees, commissions, bid-ask spreads, and other expenses tied to execution and negotiation. It directly matches the description of the expenses involved in actually putting a deal together and executing it.
In summary, the other options describe separate concepts (tangible assets, risk, and liquidity) that do not align with the definition of the costs of executing a deal, whereas transaction costs directly address the described concept.

The expenses involved in actually putting together and executing a deal are called _____.

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