Large-Cap Shares Have Much Greater Liquidity Than the Shares of Smaller

question 81

Multiple Choice

Large-cap shares have much greater liquidity than the shares of smaller companies.This is reflected in their:

• A)greater daily turnover
• B)greater daily turnover and wider bid-ask spreads
• C)greater daily turnover, wider bid-ask spreads and lower price resilience
• D)greater daily turnover, narrower bid-ask spreads and lower price resilience
• E)greater daily turnover, narrower bid-ask spread and greater price resilience.

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Definitions:

Overall Operations

Refers to the comprehensive activities and processes undertaken by a business to produce and sell its products or services.

Overall Cost of Capital

The weighted average rate of return a company must pay to finance its assets, combining the cost of debt and equity funding.

Riskiest Operations

Business activities or projects that carry the highest level of uncertainty and potential for loss, often involving significant investment and exposure to volatile markets.

Divisions

Separate units or sections of a larger organization, often characterized by distinct operations, products, or markets.