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High-Frequency Trading Involves Scanning the Latest News and Stock Quotes

question 15

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High-frequency trading involves scanning the latest news and stock quotes with high-tech computers and using the information to trade stocks very quickly. Because it is highly automated, it happens a thousand times faster than an eye can blink. Though each trade might make a fraction of a penny, it accounts for about two-thirds of the stock market trading. How does this financing trend reflect the efficient markets hypothesis?


Definitions:

Milgram

Refers to Stanley Milgram, an American social psychologist best known for his controversial experiments on obedience to authority figures, conducted in the 1960s.

Innocent Stranger

A concept referring to an individual who is perceived as not guilty of any wrongdoing or malice.

Conformity

The act of altering one's behaviors, attitudes, or beliefs to match those of a group or to meet the expectations of others.

Task Difficulty

Task Difficulty refers to the level of challenge presented by a task, which can significantly influence performance and outcome.

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