Which One of the Following Would Reduce the Efficiency of the Market

question 141

Multiple Choice

Which one of the following would reduce the efficiency of the market process?

• A) promoting competitive markets
• B) protecting persons from fraud and theft
• C) providing a stable monetary environment
• D) protecting consumers by imposing legally mandated price ceilings

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Definitions:

Entity's Profits

The financial gain that remains after subtracting all expenses, taxes, and costs from a company's revenue.

Residual Interest

The interest remaining in a trust or estate once all prior obligations, claims, or interests have been satisfied.

Equity Instrument

Any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Derivative Instrument

A financial contract whose value is derived from the value of an underlying asset, index, or rate.