Which of the Following Statements Regarding the Law of One

question 8

Multiple Choice

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

• A) At any point in time, the price of two equivalent goods trading in different competitive markets will be the same.
• B) 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.
• C) If equivalent goods or securities trade simultaneously in different competitive markets, then they will trade for the same price in both markets.
• D) An important property of the Law of One Price is that it holds even in markets where arbitrage is possible.

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Definitions:

No Further Obligation

A term indicating that a party has no continuing responsibility or duty under a contract or agreement.

Commercial Unit

A unit of goods that is regarded as a single whole for purposes of transaction and assessment, often used in the context of sales and commercial law.

Commercial Usage

The habitual practices and norms that are recognized and enforced among businesses in specific industries.

Deemed To Have Accepted

Considered to have agreed to or acknowledged something, typically by failing to object within a certain period.