The Assumptions Underlying the Cost-Of-Carry Model Do NOT Include the Following

question 11

Multiple Choice

The assumptions underlying the cost-of-carry model do NOT include the following:

• A) no market frictions
• B) no credit risk
• C) competitive and well-functioning markets
• D) constant interest rates
• E) no arbitrage opportunities

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Definitions:

Inefficently

Operating in a manner that does not maximize productivity or use resources in the best possible manner.

Taxes

Imperative monetary contributions or distinct types of taxation demanded from a taxpayer by a public authority to cover the costs of governmental functions and diverse public financial needs.

Incentives

Motivators or stimuli that encourage or promote certain behaviors or actions by offering rewards or benefits.

Market Size

The total number of potential buyers and sellers of a particular product or service within a given market.