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1. ABC stock has a bid price of $40.95 and an ask price of $41.05. Assume there is a $20 brokerage commission. a. What amount

1. ABC stock has a bid price of $40.95 and an ask price of $41.05. Assume there is a

$20 brokerage commission.

a. What amount will you pay to buy 100 shares?

b. What amount will you receive for selling 100 shares?

c. Suppose you buy 100 shares, then immediately sell 100 shares with the

bid and ask prices being the same in both cases. What is your round-trip

transaction cost?

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