The Designated Market Maker (DMM) on the NYSE has received the following bids, each to purchase 100 shares of XYZ stock at the market open: 9.98, 9.99, 10.00, 10.01, 10.02, and 10.03. She has received the following offers, each to sell 100 shares of XYZ stock at the market open: 10.01, 10.02, 10.03, 10.04, 10.05, and 10.06.

a. Assume that this is the only market for the stock. What is the best bid prior to the markets open? What is the best offer?

b. Describe the demand curve or schedule for XYZ stock based on the data above.

c. Describe the supply curve or schedule for XYZ stock based on the data above.

d. What is the clearing price for this market? That is, at what price does supply equal demand for the stock?

e. Based on your solution to part d above, what bids execute at open? What offers execute at open?

f. Again, assume that this is the only market for the stock. What is the open NBBO after the initial clearing of orders?