Which One of These Best Defines the Objective of a Well-Functioning

question 38

Multiple Choice

Which one of these best defines the objective of a well-functioning financial market?

• A) Establishing accurate security prices
• B) Creating higher security prices
• C) Eliminating short-selling profits
• D) Increasing shareholder value by any means possible

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Definitions:

AASB 9

The Australian Accounting Standards Board standard on Financial Instruments, outlining the requirements for recognizing and measuring financial assets and liabilities.

Fair Value

The amount one would expect to get from selling an asset or the cost to transfer a liability during a regulated transaction involving parties in the market.

Directly Attributable Costs

Costs that can be directly associated with a specific asset or service, and which would not have been incurred if the asset or service had not been acquired or produced.

Financial Liability

An obligation to deliver cash or another financial asset to another entity.