Reading 45: Execution of Portfolio Decisions Los e~Q1-3 market, relevant, criteria, following

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LOS e: Explain the criteria of market quality and evaluate the quality of a market when given a description of its characteristics.

Q1. Which of the following is NOT a relevant measure of market quality?

A)   Liquidity.

B)   Assurity of completion.

C)   Market prevalence.

 

Q2. Market A has average bid and ask sizes of 400 shares. Market B has average bid and ask sizes of 600 shares. Market C has average effective spreads of $0.034. Market D has average effective spreads of $0.039. Comparing A to B and C to D, which markets are of the highest quality?

A)   B and D.

B)   A and C.

C)   B and C.

 

Q3. Which of the following is NOT a characteristic of a liquid market?

A)   Integrity.

B)   An abundance of traders.

C)   Homogenous traders.

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