Tuesday, November 25

Characterisics of well-functioning securities market

Well-functioning markets provide:
(1) timely and accurate information
(2) high liquidity
· marketability - ability to sell an asset quickly
· price continuity - prices do not change substantially from one transaction to another unless significant new news arises
· depth- numerous buyers & sellers
(3) internal efficiency- access and settlement at a low cost.
(4) External Efficiency- rapidly adjust to new information

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