In general, stock markets allow for more price efficiency and attract more investors when they have all of the following except:

Question

Quizplus · Accepted Answer

Stock markets with less stringent accounting requirements may attract more investors initially due to lower compliance costs for companies, but this can lead to lower quality financial reporting and increase the risk of fraud or financial mismanagement. Thus, having more stringent accounting requirements can actually increase confidence in the market and attract long-term investors. Having more voting rights for shareholders, more legal protection, and more enforcement of laws also increase confidence in the market and attract investors.

In General, Stock Markets Allow for More Price Efficiency and Attract