Final answer:
Algorithmic trading increases trading speed, reduces human error, and improves market liquidity, making 'All of the above' the correct answer.
Step-by-step explanation:
Algorithmic trading accomplishes several objectives:
- Increases trading speed by executing transactions at a rate impossible for a human trader.
- Reduces human error as algorithms follow predefined instructions, leading to a decrease in mistakes caused by emotional or cognitive biases.
- Improves market liquidity by providing continuous trade flow and narrowing bid-ask spreads due to high-frequency trading activities.
Therefore, the correct answer is 4) All of the above.