Two Stock Market Based Costs of Liquidity That Affects the Cost

question 35

Multiple Choice

Two stock market based costs of liquidity that affects the cost of capital are the:

• A) bid-ask spread and the specialist spread.
• B) market impact cost and the brokerage costs.
• C) investor opportunity cost and the brokerage costs.
• D) bid-ask spread and the market impact costs.
• E) None of these.

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Definitions:

Utilitarian

A philosophy focusing on the outcomes of actions, aiming to achieve the greatest good for the greatest number.

Distributive Justice

Concerns the fair and equitable distribution of benefits and burdens among members of a society or a group.

Harm

Physical or psychological damage or injury to an individual or group, or the potential to cause such damage.

Harassment

Unwanted, aggressive behavior or conduct that targets an individual or group, often causing distress or creating a hostile environment.