medium · Market Microstructure adverse-selection
Using the Probability of Informed Trading (PIN) model, if the probability of an information event (α) is 0.40, the informed arrival rate (μ) is 300, and the uninformed arrival rates (ε_b, ε_s) are both 500, what is the calculated PIN?
- 0.400
- 0.240
- 0.107
- 0.120
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