A Tobin Tax Levied on Trading in Financial Products or on Trading

A Tobin tax levied on trading in financial products or on trading in foreign currencies has been suggested as a policy in the UK and Europe. Which of the following statements about the proposed tax is true?

A) A Tobin tax may increase the volume of transactions especially in derivatives, designed for purely speculative purposes, by decreasing their cost.
B) The tax will help encourage larger speculative flows of foreign currencies across borders as investors try to take further advantage of small movements in the exchange rate.
C) The tax is likely to encourage firms to invest more heavily in the UK as it will enable them to take further advantage of small movements in prices.
D) The tax will be levied at a low rate so it will have a minimal effect on trading in shares for long- term investment, but it will dampen speculative trades that take advantage of tiny potential gains from very short- term price movements.
E) The tax is unlikely to affect speculative trades that aim to gain from short- term price movements, but it will have a significantly adverse effect on long- term investment plans.