answer all the questions below. The word limit is 1000 words over all. . . You will need to base your answers on the lecture notes and the relevant reading and summarize what you have learnt in your own words. You need to reference your work properly. Note the following:
You should use the material we have covered in the lectures to answer the questions. You do not need to not use specific numerical or algebraic examples as part of your answer. Do not use not refereed internet sources like Wikipedia as part of your sources for writing this essay. Reference your sources in the text where appropriate and provide a list of references following your answer
1) Explain the difference between market orders and limit orders and provide examples of why investors may prefer to use one type of order or the other
2) Explain how the degree of markets transparency. may affect the trading strategies of investors and affect overall market quality.
3) Provide examples of trading strategies that may be responsible for observed characteristics of asset prices. such as fat tails and volatility clustering.
4) Summarize the various theories that explain the origin of the bid-ask spread in decentralized markets.