medium · Market Microstructure adverse-selection
In a Kyle (1985) model, the price impact coefficient λ is $0.0001.
If the market maker observes a net order imbalance of +10,000 shares (more buyers than sellers), what is the new equilibrium price if the prior price was $50.00?
- $50.10
- $60.00
- $51.00
- $50.01
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