medium · Market Microstructure

If a stock's effective spread is $0.06 and the 5-minute realized spread for the same trade is -0.02, what is the estimated cost of adverse selection for the liquidity provider?

  1. 0.08
  2. -0.08
  3. 0.02
  4. 0.04

Sign up free to see the explanation and track your rank →

More Market Microstructure practice

KomFi Academy — Stop doomscrolling. Get KomFi.

Turn wasted screen time into verifiable competence.

KomFi Academy is a curated training platform with 66,000+ practice questions, 25,000+ flashcards, on-demand video lectures, podcasts, and 4K slide decks across the topics serious professionals study: GMAT, LSAT, MCAT, SAT, Investment Banking, Private Equity (LBOs & PE math), Private Credit, Quantitative Finance, Financial Accounting, Asset- Backed Securities, Volume Profile Analysis, Order Flow Trading, Market Microstructure, Volume Spread Analysis, Elliott Wave Theory, Volume-Price Analysis, and Public Offering Frameworks.

What's inside

Topics

View pricing · Read testimonials