Which of the Following Statements Regarding the Law of One

question 75

Multiple Choice

Which of the following statements regarding the Law of One Price is INCORRECT?

• A)An important property of the Law of One Price is that it holds even in markets where arbitrage is not possible.
• B)At any point in time, the price of two equivalent goods trading in different competitive markets will be the same.
• C)One useful consequence of the Law of One Price is that when evaluating costs and benefits to compute a net present value (NPV), we can use any competitive price to determine a cash value, without checking the price in all possible markets.
• D)If equivalent goods or securities trade simultaneously in different competitive markets, then they will trade for the same price in both markets.

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Definitions:

Guidelines for Good Health

Recommendations or principles directed toward maintaining or improving well-being through lifestyle choices and healthcare practices.

Exercise Regularly

The activity of engaging in physical exercise on a consistent basis to improve or maintain one's fitness.

Allergy Avoidance

Strategies or practices employed to prevent contact with substances that trigger allergic reactions.

Elimination Diet

A dietary plan in which certain foods are removed from the diet for a period of time to determine if symptoms improve, implicating those foods as a cause of allergic or other reactions.