Hey there,

Not too sure how to work this one out.

Any help would be greatly appreciated.

Thanks

Question 24 Answer the following question based on the following quote revisions of a dealer. Transaction time 1:02pm Dealer's quote Ask = 10.04 Bid = 10.01 Buyer 1 arrived and traded at $10.04 1:10pm Dealer's quote Ask = 10.05 Bid = 10.01 Seller 1 arrived and traded at $10.01 1:16pm Dealer's quote Ask = 10.04 Bid = 10.00 Buyer 2 arrived and traded at $10.04 What is the dealer's average transaction cost component if the adverse selection component is 65% of the total spread, given that the average quoted spread is $0.15 and the effective spread is $0.12? O a. $0.03 O b. $0.042 O c. $0.0525 O d. $0.0975 O e. None of the above