Which of the following is NOT a reason advanced for the existence of comparative advantages within financial markets?
A)The imposition of larger credit risk premiums by long-term investors, relative to those imposed by shorter-term investors.
B)Smaller credit risk premiums are appropriate in short-term financing because of the shorter repayment period.
C)Taxes and regulation may impact borrowers differently.
D)Indifference regarding the risk profile of borrowers in some markets.
E)Some borrowers will have a 'home-ground advantage'.

Question

Quizplus · Accepted Answer

All of the other options are reasons that are commonly given for the existence of comparative advantages within financial markets. Option D is not a reason for such advantages. Instead, it suggests a lack of differentiation in the risk profile of borrowers in certain markets.

Which of the Following Is NOT a Reason Advanced for the Existence