Capital market imperfections leading to financial market segmentation include:

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Capital market imperfections that lead to financial market segmentation include asymmetric information between domestic and foreign-based investors, high securities transaction costs, and foreign exchange risks. Asymmetric information can make it difficult for foreign investors to accurately assess risk, while high transaction costs may deter foreign investors from participating in a market. Additionally, foreign exchange risks can make it challenging for investors to accurately predict returns on their investments. All of these factors contribute to financial market segmentation.

Capital Market Imperfections Leading to Financial Market Segmentation Include