Answer: the costs of arranging trades are low.

## Explanation Operational efficiency in a financial system refers to how well the system facilitates transactions and trading activities. The key aspects are: 1. **Operational Efficiency** focuses on the **costs and speed** of executing transactions. It measures how cheaply and quickly trades can be arranged and settled. 2. **Option A is correct** because operational efficiency specifically relates to low transaction costs, minimal delays, and smooth execution of trades. 3. **Option B describes Informational Efficiency** (or market efficiency), which is different from operational efficiency. Informational efficiency means prices reflect all available information. 4. **Option C describes Allocational Efficiency**, which refers to the optimal allocation of capital and resources in an economy to their most productive uses. **Key Distinctions:** - **Operational Efficiency**: Low transaction costs, fast execution - **Informational Efficiency**: Prices reflect all available information - **Allocational Efficiency**: Resources allocated to most valuable uses In financial systems, operational efficiency is a prerequisite for both informational and allocational efficiency, as high transaction costs can impede price discovery and capital allocation.

Author: LeetQuiz .