Q1: Choose the correct answer with explanations: (v) Markets that have high costs of trading in terms of dealer's commissions, bid-ask spreads and order price impacts are most likely to be: (i) GP Investment bank agrees to help IFT Corp. raise funds on a best effort basis. Who bears the risk when the entire issue is not sold to the public at the stipulated offering price? A. Allocationally inefficient. B. Informationally inefficient. C. Operationally inefficient. A. GP B. IFT. C. Buyers of the part of the issue that is sold. (ii) An automobile manufacturing company announces that it plans to sell 10 million of its shares to the public. This transaction is most likely a sale in the: End of document I A. futures market. B. primary market. C. secondary market. (iii) The cost of raising capital in primary markets: A. becomes low when secondary markets are liquid. B. becomes high when secondary markets are liquid. C. is independent of the liquidity of secondary markets. (iv) A financial system characterized by liquid markets, low commissions and order price impacts is said to be which of the following? A. Allocationally efficient. B. Informationally efficient. C. Operationally efficient