If the assumption of "no market frictions" holds,then which of the following is INCORRECT?

Question

Quizplus · Accepted Answer

The assumption of "no market frictions" typically includes no transactions costs, no margin requirements, no short sales restrictions, and no taxes, but it does not necessarily imply there is no credit risk. Credit risk is related to the possibility of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations, which can exist even in frictionless markets.

If the Assumption of "No Market Frictions" Holds,then Which of the Following