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

Question

Quizplus · Accepted Answer

Continuous auction markets require a high level of trading activity to be cost-effective, as they rely on a constant flow of buyers and sellers to establish fair market prices. In contrast, broker markets involve brokers connecting buyers and sellers and may not require as much trading activity, while dealer markets involve specialized dealers buying and selling securities themselves and are more flexible in terms of trading volume. Direct search markets involve buyers and sellers directly searching for each other and may not require high levels of trading activity.

Which One of the Following Types of Markets Requires the Greatest