A "thin" market is characterized by ________________________.
A) Infrequent trades
B) Lower-priced assets
C) Unrated financial securities
D) None of these

Question

Quizplus · Accepted Answer

A thin market is characterized by infrequent trades, meaning that there are not many buyers and sellers actively participating in the market. This can lead to a lack of liquidity and wider bid-ask spreads, making it more difficult to buy or sell assets at favorable prices. The price dynamics of thin markets can also be influenced more easily by individual transactions, which may not be representative of the overall market sentiment.

A "Thin" Market Is Characterized by ________________________