Frictionless financial markets could have which of the following?

Question

Quizplus · Accepted Answer

In frictionless financial markets, there are no transaction costs, and information is freely available, meaning there would be no agency costs, bid-ask spreads, brokerage fees, or government intervention affecting transactions. However, the presence of irrational investors does not contradict the concept of a frictionless market, as their existence doesn't inherently introduce frictions into financial transactions.

Frictionless Financial Markets Could Have Which of the Following