transaction cost


Definitions (2)

1.A fee charged by a financial intermediary such as a bank, broker, or underwriter.
2.Economics: The cost associated with exchange of goods or services and incurred in overcoming market imperfections. Transaction costs cover a wide range: communication charges, legal fees, informational cost of finding the price, quality, and durability, etc., and may also include transportation costs. Transaction costs are a critical factor in deciding whether to make a product or buy it. Also called frictional cost. See also transfer cost.

Use transaction cost in a sentence

  • You need to understand how much the transaction cost will be and be sure to factor that into your budget.

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  • The transaction cost was something that I didn't like because it meant that I lost some money and therefore had less.

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  • The transaction cost was too high if we went through our primary bank so we proceeded with our secondary bank.

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