RDP 8707: Asymmetric Information and Bid-Ask Spreads in the Eurocurrency Markets Equation

σ 2 = σ ε 2 + a 2 σ u 4 σ x 2 andR= σ ε 2 / σ 2 . MathType@MTEF@5@5@+=feaagCart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLnhiov2DGi1BTfMBaeXatLxBI9gBaerbd9wDYLwzYbItLDharqqtubsr4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeGaciGaaiaabeqaamaabaabaaGceaqabeaacqaHdpWCdaahaaWcbeqaaiaaikdaaaGccqGH9aqpcqaHdpWCdaqhaaWcbaGaeqyTdugabaGaaGOmaaaakiabgUcaRiaabggadaahaaWcbeqaaiaaikdaaaGccqaHdpWCdaqhaaWcbaGaaeyDaaqaaiaaisdaaaGccqaHdpWCdaqhaaWcbaGaaeiEaaqaaiaaikdaaaaakeaacaqGHbGaaeOBaiaabsgacaaMc8UaaeOuaiabg2da9iabeo8aZnaaDaaaleaacqaH1oqzaeaacaaIYaaaaOGaai4laiabeo8aZnaaCaaaleqabaGaaGOmaaaakiaac6caaaaa@56C8@