If equivalent investment opportunities trade simultaneously in different competitive markets,then they must trade for the ________ price in ________.
A) higher, one market than another
B) lower, one market than another
C) same, both markets
D) different, both markets

Question

Quizplus · Accepted Answer

If the investment opportunities are equivalent and trade simultaneously in different competitive markets, the forces of supply and demand will ensure that their prices will become equal in both markets. This is known as the law of one price, which states that identical goods should have the same price in different markets after adjusting for transportation costs and other costs associated with differences between markets. Therefore, the prices must be the same in both markets.

If Equivalent Investment Opportunities Trade Simultaneously in Different Competitive Markets,then