FINA3307: In their race to profit, informed traders often duplicate their research efforts. Since research is often very expensive: Trading in Securities Markets Assignment, UWA, Australia
University | University of Western Australia |
Subject | FINA3307: Trading in Securities Markets Assignment |
1. In their race to profit, informed traders often duplicate their research efforts. Since research is often very expensive, these duplicate efforts suggest that the competition among informed traders creates economic inefficiencies. Should informed traders collude to lower their costs? Would their collusion make prices more efficient?
2. What are the differences between the traditional and market microstructure definition of market efficiency? Explain the trade-off between market liquidity and market efficiency.
3. The statistical study by Barclay and Warner (1993) found that very small trades and very large trades did not have a significant impact on stock prices. They found that medium-sized trades had the greatest impact on the security process. Describe how this empirical finding might be consistent with the theoretical results of Kyle (1985). This question is from Chapter 5 Exercises.
Are You Searching Answer of this Question? Request Australian Writers to Write a plagiarism Free Copy for You.
4. You observe the following quote revisions of a dealer before each trade.
a. Discuss the inference you could make regarding the “informativeness” of Seller 1 and Buyer 1.
b. Calculate the dealer’s adjustment for adverse selection
5. Suppose that dealer inventory costs are the sole source of the dealer spread. Further, suppose that a transaction was executed at the bid. Would subsequent bids and offer quotes tend to be higher or lower? Why? Now, suppose that a transaction is executed at the offer. Would subsequent bids and offer quotes tend to be higher or lower? Why? In either scenario, would transaction prices tend to exhibit positive, negative, or zero autocorrelation? Why?
6. Suppose that you are a trader at a large trading firm. You have just received a sell order from a mutual fund for 1 million shares of stock that have an average daily volume of 250,000 shares. What alternatives do you have to complete this client order by the end of the trading day?
7. Discuss the dilemma that institutional traders face when deciding the optimal level of transparency in the market that is best for their trading.
8. Ticker EAS is traded on the Gulf, Pacific, and Atlantic Stock Exchanges. The sequence of bids in the consolidated record is:
Construct the NBB at each time.
9. What are the temporary and permanent price effects of block trading?
a. Given the following transaction records, decide which trades are likely to be
classified as blocks.
b. Compute the temporary and permanent price effects of two block trades [you can calculate the change in price by using continuous returns, i.e., ln(Pt – Pt-k)].
Get Solution of this Assessment. Hire Experts to solve this assignment for you Before Deadline.
Recent Solved Questions
- CHC30113: PART A holistic Dovelopment Nutrition is extremely important in relation to a child’s brain development: Certificate III in Early Childhood Education and Care Assignment, Tafe Nsw, Australia
- Potters Hardware operates a small business reliant on Tradespeople sourcing their requirements and to encourage business Potters Hardware: Administer financial Accounts Course Work, CSU, Australia
- AMSM700: Demonstrate The Linkage between the Organization’s Strategy and Its Vision: Strategic Management Assignment, ARA, New Zealand
- EDU70007: Critical evaluation requires you to identify the limitations and benefits of each strategy. This will require concise use of language: English in Primary School Assignment, SBT, Australia
- MN604- Research in Information Security Management
- BSBXCS303: You are employed by Anytown Marketing as an IT Consultant to assist in implementing their data security and privacy: Securely manage personally identifiable information and workplace information Course Work, AU, Australia
- CHCDIS002: Complete the support plan provided in the Case Study, identifying three ways in which you could support: Follow established person-centred behaviour supports Casestudy, VU, Australia
- CPC50210: You are then to complete the contract for the residential project Completing the contract means that you are to complete: Diploma of Building and Construction Assignment, RMIT, Australia
- The Separate Calculation For Variable Cost Per Unit: Managerial Accounting Assignment, DU, Australia
- SITXFIN003: This part contains information on assessments for this unit of competency and how assessments will be conducted: Manage Finances Within a Budget Assignment, AC, Australia