Which of the Following Statements Is FALSE

question 4

Multiple Choice

Which of the following statements is FALSE?

• A) A real market might also differ from the perfect market because of the possibly frequent event of a temporary imbalance in the number of buy and sell orders that investors may place for any security at any one time.
• B) An unmatched or unbalanced flow of buy and sell orders causes a problem in that the security's price may change abruptly, even if there has been no shift in either supply or demand for the security.
• C) The fact of imbalances in buy and sell orders cannot explain the need for the dealer or market maker, who stands ready and willing to buy a financial asset for its own account (to add to an inventory of the financial asset) or sell from its own account (to reduce the inventory of the financial asset).
• D) An unmatched or unbalanced flow of buy and sell orders causes a problem in that buyers may have to pay higher than market-clearing prices (or sellers accept lower ones) if they want to make their trade immediately.

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Definitions:

Concise Documents

Documents that are brief yet comprehensive, with no unnecessary words, making them clear and easily understood.

Ineffective Examples

Instances or cases that fail to achieve the desired outcome or demonstrate the point effectively.

Effective Examples

Illustrative cases or instances that clearly demonstrate a point, concept, or method, effectively supporting the argument or instruction.

Hedge Sentences

Statements that are deliberately made less definitive or assertive, often by using qualifiers or modal verbs, to soften claims and acknowledge uncertainty or variability.