Final answer:
A transaction involving fewer than 25 securities annually can still make sense depending on the context and the needs of the parties involved. The economic significance of a transaction should be assessed on a case-by-case basis.
Step-by-step explanation:
A transaction involving fewer than 25 securities annually can still make sense depending on the context. It is important to consider the overall economic significance of the transaction and the specific needs of the parties involved.
For example, a small business or individual investor may have a lower volume of transactions compared to a large corporation or institutional investor.
The lower limit for such transactions can vary based on factors such as the size of the portfolio, the type of securities involved, and the objectives of the parties. While there is no universally defined lower limit, it is generally understood that a transaction involving fewer securities may be considered less significant.
For instance, a portfolio manager may decide to make small, strategic adjustments to a portfolio by buying or selling a handful of carefully selected securities.
These transactions may still have a meaningful impact on the overall performance of the portfolio, even if they involve less than 25 securities annually. Therefore, the economic significance of a transaction should be assessed on a case-by-case basis.