Competitiveness condition

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A capital market satisfies the Competitivity condition or competition capability condition if and

• if the choice of a capital budget or the supply or demand of financial instruments on this capital market does not influence the price of other financial instruments.

Real capital markets typically do not meet this condition, but for some capital markets and for some financing instruments it is assumed that actions with them do not lead to any appreciable price influence, and therefore the competitivity condition is approximately fulfilled in this case .

See also: spanning condition