'If equivalent investment opportunities trade simultaneously in different competitive markets, then they must trade for the same price in both markets.' What do we call the above statement?
A)the Net Present Value rule
B)the Valuation Principle
C)the Law of One Price
D)the time value of money

Question

Quizplus · Accepted Answer

The statement is known as the Law of One Price, which states that if equivalent investment opportunities are available in different markets, they should trade at the same price. This principle forms the basis of modern finance theory and is used to determine the fair value of assets. The other options are not relevant to the given statement.

'If Equivalent Investment Opportunities Trade Simultaneously in Different Competitive Markets