I will have to play with arrows, but I suspect they are like bolts. The better the material, the more accurate the bolt. I use steel bolts. I tried iron bolts, but I can see them drop and deflect more when shot from the same distance as a steel bolt. Enchanted bolts are sold/traded off unless they have an area effect since I can see them deflect from the line of my shot worse than a iron bolt.
Note: The "Area effects.mod" from the developers sells a Dwarven crossbow. My new archer saved her money and walked to Vivec to buy it and bolts. I have not gone back to a bow since 30-30 damage has been better for her than any 1-50 damage on a summoned bow she called into existence (once her markswoman skill got over 50).
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