Which of the Following Is Not a Source of Market

question 7

Multiple Choice

Which of the following is not a source of market failure?

• A) multiple firms selling identical products
• B) imperfect competition
• C) imperfect information
• D) public goods
• E) externalities

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Definitions:

Risk-Free Rate Of Return

The theoretical rate of return of an investment with zero risk of financial loss, often represented by the yield of government bonds.

Exercise Price

The price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset or stock.

Pure Discount Bond

A type of bond that is purchased at a price lower than its face value, with the face value being repaid at the time of maturity. It does not pay periodic interest.

Risk-Free Rate

The theoretical return on investment with zero risk of financial loss, often represented by the yield on government bonds.