Which one of the following types of markets requires the greatest level of trading activity to be cost effective?

Question

Quizplus · Accepted Answer

A continuous auction market is a type of market where buyers and sellers trade continuously, and prices are determined by the forces of supply and demand. In such a market, a high level of trading activity is necessary to maintain liquidity and efficiency, and to ensure that prices are fair and accurate. In a broker market, transactions are mediated by brokers, while in a dealer market, a small number of dealers buy and sell securities for their own accounts. In a direct search market, buyers and sellers find each other through direct communication or advertising, which results in lower trading activity overall.

Which One of the Following Types of Markets Requires the Greatest