"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:

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily reflect its market value.

Convertible Preferred Stock

A type of preferred stock that gives holders the option to convert their preferred shares into a fixed number of common shares, usually after a predetermined date.

Common Stock

A type of equity security that represents ownership in a corporation, granting holders voting rights and dividends.

Par Value

The face value of a bond or the stock value stated in the corporate charter.