You observe two prices $65.1 and $65.2 quoted in the market for the stock of Company ABC.

Question:

The brokerage commission includes:
(i) 0.3% of the transaction amount

(ii) A fixed cost of $50 per transaction.

Calculate how much you gain/loss if you purchase 200 shares and then sell them all immediately.

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Derivative Pricing

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Authors: Ambrose Lo

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Question Posted: Nov 22, 2023 08:17 AM

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You observe two prices $65.1 and $65.2 quoted in the market for the stock of Company ABC.

Question:

Step by Step Answer:

Among the two observed prices the bid price must be lower than or equal to the ...View the full answer

Derivative Pricing

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