A quotation differential of as little as one-sixteenth of one cent may be sufficient to encourage arbitrage activities.

Name: A quotation differential of as little as one-sixteenth of one cent may be sufficient to encourage arbitrage activities.
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Question

Quizplus · Accepted Answer

This statement is true. Arbitrage activities involve taking advantage of tiny price differences in order to make a profit. Even a small difference of one-sixteenth of a cent can incentivize traders to engage in arbitrage.

A Quotation Differential of as Little as One-Sixteenth of One