Which of the Following Is True About Segmented Capital Markets

question 47

Multiple Choice

Which of the following is true about segmented capital markets?

• A) Exhibit different bond and equity prices in different geographic areas for identical assets in terms of risk and maturity.
• B) Exhibit the same bond and equity prices in different geographic areas for identical assets in terms of risk and maturity.
• C) Exhibit different bond and equity prices in the same geographic areas for identical assets in terms of risk and maturity.
• D) Exhibit different bond prices but the same equity prices in different geographic areas for identical assets in terms of risk and maturity.
• E) None of the above

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Definitions:

Capitalist Economy

A system of economy where the ownership of capital resources is in the hands of private individuals or companies, decisions regarding investments are privately made, and the determination of prices, output, and distribution of products is largely governed by the dynamics of competition in a free-market environment.

Price Mechanism

is the process by which the forces of supply and demand determine the price of goods and services in a market economy.

Circular Flow Model

An economic model illustrating the movement of goods, services, and money between households and businesses in an economy.

Demand

The desire and ability of consumers to purchase goods or services at given prices, playing a critical role in determining market prices and quantities.