Assertion: Financial markets results in increase in transaction cost.

Reasoning::Brokerage is charged on the stock market transactions by brokers.

Assertion (A) is not true but Reasoning (R) is correct.

The correct answer is Option 4: Assertion (A) is not true but Reasoning (R) is correct.

Assertion: Financial markets results in increase in transaction cost. This is not correct.

Financial markets play an important role in the allocation of scarce resources in an economy. Reducing the Cost of Transactions is one of the important function of financial markets. Financial markets provide valuable information about securities being traded in the market. It helps to save time, effort and money that both buyers and sellers of a financial asset would have to otherwise spend to try and find each other. The financial market is thus, a common platform where buyers and sellers can meet for fulfillment of their individual needs.

Reasoning::Brokerage is charged on the stock market transactions by brokers. This is correct. Brokers charge a commission or brokerage fee for executing buy or sell orders on behalf of investors in the stock market.