The time, effort, and money necessary, including such things as commission fees and the cost of physically moving the asset from seller to buyer. Transcations costs should also include the bid/ask spread as well as price impact costs (for example a large sell order could lower the price). Related: Round-trip transactions costs, information costs, search costs.
Nearby TermsTransaction risk Transaction tax Transactions costs Transactions motive Transcript of Account
Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University