A market maker holds an inventory of shares in order to provide immediate liquidity to traders in a particular stock market. The market maker is compensated by the bid-ask spread. Which of the following will likely increase the bid-ask spread?

I. Unusually high trading activity in a particular stock

II. Multiple market makers competing for order flow

III. Market-wide volatility

IV. Many of the stock in the inventory have an increase in the debt-to-equity ratio.

Group of answer choices

I and III

IV only

I only

III only

I and II

II only

II and IV