"If Equivalent Investment Opportunities Trade Simultaneously in Different Competitive Markets,then

question 13

Multiple Choice

"If equivalent investment opportunities trade simultaneously in different competitive markets,then they must trade for the same price in both markets."
What do we call the above statement?

• A)the Net Present Value rule
• B)the Law of One Price
• C)the Valuation Principle
• D)the time value of money

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Definitions:

Liability

An obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services, or other yielding of economic benefits in the future.

Fixed Asset

Long-term tangible property owned by a business that is used in its operations and not expected to be converted to cash in the short term.

Market Value

The current price at which an asset or service can be bought or sold, often determined by supply and demand in the marketplace.

Balance Sheet

A financial statement that presents a company's assets, liabilities, and shareholders' equity at a specific point in time.