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Answer: The demand for low-latency networks has increased.
**Explanation:** The correct answer is **A** because algorithmic trading necessitates access to low-latency networks, and its widespread adoption has heightened the demand for such networks. Low-latency systems, which operate on networks capable of transmitting high volumes of data with minimal delay, are critical for automated trading applications that rely on real-time prices and market events. In contrast, high-latency systems do not require real-time data processing. **Incorrect Answers:** - **B:** Markets have actually fragmented into multiple trading destinations, including electronic exchanges, alternative trading systems, and dark pools, rather than consolidating. - **C:** While algorithmic trading is used for large institutional orders, it typically involves slicing these orders into smaller pieces and executing them across various trading venues, leading to a decline in average trade sizes.
Author: LeetQuiz Editorial Team
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Which of the following statements is most accurate regarding the widespread adoption of algorithmic trading in financial markets?
A
The demand for low-latency networks has increased.
B
Markets have become more consolidated in terms of trading venues.
C
Average trade size has risen as algorithmic trading is employed to execute large institutional orders.