In 2001, the NYSE switched from a fractional pricing system (stock priced in increments of 1/8 of a dollar) to a decimal pricing system (stock priced in increments as small as 1 cent). Explain how this might encourage front-running by traders?
Answer to relevant QuestionsWhy might OTC derivatives be considered more risky than exchange-traded derivatives?Suppose you are a wealth advisor and a client has asked for your recommendation on which of the BRIC countries poses the least risk and most opportunity for investment growth. Briefly compare the perceived risks and benefits ...Describe a Credit Default Swap (CDS). What are regulators trying to do to mitigate risk in the CDS market?Where does the name hedge fund come from?When is merger arbitrage an attractive investment strategy? What are the downside risks of this strategy?
Post your question