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Problem 4. (Supt) Explain briefly the liquidity measures: Quoted Spread, Effective Spread and Realized Spread. 1.i'lfhat is their practical relevance? Explain the meaning of the

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Problem 4. (Supt) Explain briefly the liquidity measures: Quoted Spread, Effective Spread and Realized Spread. 1".i'lfhat is their practical relevance? Explain the meaning of the decomposition (1) EffectiveSpread = RealizedSpread + PriceInlpact and how the last term is a measure of the adverse selection

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