Which of the Following Conditions Do Not Characterize Perfect Capital

question 8

Multiple Choice

Which of the following conditions do not characterize perfect capital markets?

• A) Trading is costless; access to the financial markets is free.
• B) Information about borrowing and lending opportunities is readily available.
• C) There are many traders; no single trader can have a significant impact on market prices.
• D) A few influential firms can control the financial market.

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Definitions:

Revenues on Account

Earnings from sales or services that have been completed but not yet paid for by customers.

Unearned Revenues

Money received by a company for goods or services that have not yet been provided, classified as a liability on the balance sheet until the services or goods are delivered.

Fair Market Value

The price at which an asset would sell in the marketplace given willing, informed, and unpressured buyers and sellers.

Transfers

Movements of funds or resources from one account to another within an organization or between organizations.