The Distinguishing Feature of a Well-Functioning Financial Market Is the

question 8

Multiple Choice

The distinguishing feature of a well-functioning financial market is the

• A)continual increase in the liquidity of most assets.
• B)continual reduction in the riskiness of most assets.
• C)increased ease of converting common stocks into bonds.
• D)incorporation of available information into asset prices.

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Definitions:

Cognitive

Pertaining to the mental processes involved in gaining knowledge and comprehension, including thinking, knowing, remembering, judging, and problem-solving.

Psychological

Pertaining to the mind or mental processes, encompassing emotions, thoughts, and behaviors.

Fovea

An area near the center of the retina that is dense with cones and where vision is consequently most acute.

Cones

Cone-shaped photoreceptors that transmit sensations of color.