Multiple Choice
Suppose there are 11 buyers and 11 sellers,each willing to buy or sell one unit of a good,with values {$14,$13,$12,$11,$10,$9,$8,$7,$6,$5,$4,}.Assume no transaction costs and a competitive market.At the optimal bid-ask spread,how many transactions would the market maker undertake in this market
A) two transacttions
B) three transactions
C) four transactions
D) five transactions
Correct Answer:
Verified
Correct Answer:
Verified
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