medium · Market Microstructure adverse-selection
An informed analyst estimates the fundamental value of a stock at $46.20 while it trades at $40.00.
If the analyst submits buy orders for 50,000 shares and the market's price impact coefficient λ is 0.00008, what is the new market price after the trade is processed?
- $40.04
- $46.20
- $44.00
- $42.00
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