Which of the following characteristics of financial markets are good for investors?
I. Availability of timely and accurate information.
II. Liquidity.
III. Large bid-ask spreads.
IV. Rapid price adjustment to new information.

Question

Quizplus · Accepted Answer

I. Availability of timely and accurate information is good for investors because it allows them to make informed decisions about their investments.

II. Liquidity means that investors can easily buy and sell assets, which is also good for investors because it allows them to quickly change their investment positions.

III. Large bid-ask spreads are not good for investors because it means that they will pay a higher price to buy an asset and receive a lower price when selling it, resulting in a loss for the investor.

IV. Rapid price adjustment to new information is good for investors because it means that the market quickly incorporates new information into asset prices allowing investors to react accordingly.

Which of the Following Characteristics of Financial Markets Are Good