LanceTX Wrote: ------------------------------------------------------- > Higher taxes and transaction costs are impediments > to the flow of capital, thus making NOT fully > integrated. thats what I thought…
I guess its how you interpret the question. They can not be FULLY integrated with these impediments, but somewhat.
C for me. The question states that capital has high barriers to overcome but not impossible ones. You can have integrated markets with these high cost, especially if the domestic nation offsets some/all of the cost (i.e. tax credits). It’s not ideal but more in touch the real world. For example, India has extremely high barriers yet it is slowly being integrated into the global economy.
dinesh.sundrani Wrote: ------------------------------------------------------- > Slash is bang-on! That was Schweser’s description > too… gimme my candy most people were thinking of the markowitz assumptions being violated
i hate these types of worded questions… it’s too open-ended. basically anything is possible.
i hate these types of worded questions… it’s too open-ended. basically anything is possible, but then they aren’t consistent with that in other areas.
Slash let us slash this L2 and we can then probably open up a M&M candy store right on broadway.
b
For those that got C, do you agree that the market is still segmented? My notes state that segementation will result from transaction costs. Are we saying that segmentation doesn’t necessarily mean non-integration? One comment for those of you that picked B (or D): Options A and C contradict each other so that should tell you that one of them has to be the answer (they can’t both be True or False). I don’t think that’s a particularly useful exam tip because CFA questions aren’t that shabbily written.