Which of the Following Statements Is FALSE

question 30

Multiple Choice

Which of the following statements is FALSE?

• A)No arbitrage opportunities will exist until the underlying prices diverge by more than the amount of the transaction costs.
• B)Because you will generally pay a slightly lower price when you buy a security (the ask price)than you receive when you sell (the bid price)you will pay the bid-ask spread.
• C)The price of a security should equal the present value of its cash flows,up to the transaction costs of trading the security and the cash flows.
• D)In most markets,you must pay transactions costs to trade securities.

---

Definitions:

CPM Network

A project management tool that models tasks, timelines, and dependencies within a project as a network, standing for Critical Path Method.

Immediate Predecessor

In project management, refers to an activity that must be completed directly before another specific activity can commence.

Network Paths

Sequences of connected nodes and links in a network diagram, representing possible routes through a project schedule or communication framework.

Critical Path

The longest sequence of activities in a project plan that must be completed on time for the project to complete on due date.