The ________, the greater the probability of the market maker ________ in excess of a stated bound between the time of buying and reselling the financial asset.

Question

Quizplus · Accepted Answer

The greater the variability, the higher the risk that the market maker will incur a loss by buying and reselling the financial asset. This is because the market maker may be unable to predict the future value of the asset accurately, and the price may move beyond the stated bound, resulting in a loss. Therefore, option A, which states that greater variability leads to incurring a loss, is the best choice. The other options are incorrect because they do not consider the relationship between variability and the market maker's risk of incurring a loss.

The ________, the Greater the Probability of the Market Maker