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(b) (1 point) Let's start thinking about how HFTs compete with each other. Suppose that the current limit order book only has limits orders already submitted by HFT 1: limit buy orders of 1,000,000 shares at the price of $9 and limit sell orders of 1,000,000 shares at a price of $12. Now it is HFT 2 's opportunity to submit limit orders. To make profits, at what prices should HFT 2 submit limit buy and sell orders? Hint: what would happen if HFT 2 submits limit orders at the same prices ( $9 and \$12)? Well, HFT 1's orders will take priority due to earlier submission. Further, because HFT 1's orders are larger and won't be depleted any time soon (1,000,000 shares!), for all practical purposes, submitting at the same price means that HFT 2's orders won't get a chance to be executed. (c) (1 point) Because HFTs are strategic - that is, they both take into account the behavior of the other when making their own decisions - in the end, both of them will end up submitting lots of limit orders at exactly the same bid and 3Therefore, there are a total of 7=420 markst orders submitted each day, and roughly half of them buy orders and half of them are sell orders. "Recall that the value of the security is $10.5. Thus, obe only makes money by buying at $P

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