Which of the Following Is Not Likely to Be a Reason

question 69

Multiple Choice

Which of the following is not likely to be a reason for investors to use the global capital market?

• A)They have a higher cost of capital as compared to purely domestic capital markets.
• B)They have a much wider range of investment opportunities than in a purely domestic capital market.
• C)They can diversify their portfolios internationally.
• D)They can reduce their risk through portfolio diversification to below what could be achieved in a purely domestic capital market.

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Definitions:

Oligopoly

A market structure characterized by a small number of large firms that dominate the market, leading to limited competition and potentially higher prices for consumers.

Monopolistic Industry

An industry structure characterized by a single producer or a handful of producers who control the majority of the market share, limiting competition.

Single, Unique Product

A product that is the only one of its kind and has no close substitutes in the market.

Blocked Entry

A situation in which new firms are prevented from entering a market due to high barriers to entry, such as high startup costs or strict regulations.