Suppose that international capital mobility is limited by the existence of discriminatory taxes and higher transaction costs. If these barriers are present, then which of the following is TRUE? A) The international markets will not be integrated. B) The international markets must be inefficient. C) The international markets can still be integrated. D) All international capital flows will cease.
a
C?
I feel like this is dead wrong and I am going out on a limb saying C.
A
B?? due to discriminatory taxes and higher transaction costs
but as a second thought, i guess they can still be integrated so C could be a possibilty?
Answer?
A…now where is my candy 
Correct answer is : C
send me some beer with that candy
Dinesh, what was the explanation for that one?
no candy for me…why is it C. If you have higher taxes and transition costs how can the market still integrated?!?
integrated markets just needs a sufficient number of participants to aid the flow of fund. i think it’s c
integrated is about having one price everywhere…how can you have one place everywhere when your being taxed and charged more than other countries.
Slash is bang-on! That was Schweser’s description too…
I think dinesh changed the answer cause he did not have the candy that’s bull
Higher taxes and transaction costs are impediments to the flow of capital, thus making NOT fully integrated.
Correct Deep, I chose A too, but got slapped back by the QBank with C. What a bad question to start a day with.
deep2002 Wrote: ------------------------------------------------------- > no candy for me…why is it C. If you have > higher taxes and transition costs how can the > market still integrated?!? Multinational companies still do business in international market and also pay taxes on their income from foreign subsidiaries. This is real market situation. PM theories say that there is no transaction cost and taxes but in real life there are no free lunches.