Which of the following is a key characteristic of "complete markets"?
A) Perfect information
B) A market exists for every asset and liability
C) Zero transaction costs
D) The price to sell an asset is the same as the cost to buy one

Question

Quizplus · Accepted Answer

A complete market is one where there is a market for every possible asset and liability, meaning that all risks can be hedged. This implies that there are no missing markets, and all possible contingencies can be traded. Perfect information and zero transaction costs may be desirable, but they are not necessary characteristics of complete markets. The price to sell an asset being the same as the cost to buy one is a characteristic of efficient markets, but again, not a necessary characteristic of complete markets.

Which of the Following Is a Key Characteristic of "Complete