Capital market imperfections leading to financial market segmentation include

Question

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Asymmetric information between domestic and foreign-based investors can lead to financial market segmentation as foreign investors may be hesitant to invest in a market where they do not have access to the same information as domestic investors. High securities transaction costs can also lead to market segmentation by making it more expensive for foreign investors to participate in a market. Additionally, foreign exchange risks can create barriers for foreign investors, which can further limit their participation in a market. Therefore, all of the above factors can contribute to capital market imperfections and financial market segmentation.

Capital Market Imperfections Leading to Financial Market Segmentation Include