1.

Now, let us assume that the realised uninformed trading demand is 60. That is, z=60. Let us also assume that the informed trader submits the trading demand, x, derived in Question 1.

Calculate the informed traders realised profit ().

a.

$73.03

b.

$5,200.30

c.

Other

d.

$13.03

e.

$0.00

2.

Now, let us assume that the realised uninformed trading demand is 60. That is, z=60. Let us also assume that the informed trader submits the trading demand, x, derived in Question 1.

Calculate the dealers' realised profit (MM).

a.

$0.00

b.

Other

c.

-$2,726.67

d.

-$2,665.32

e.

-$23.73

3.

Now, let us assume that the realised uninformed trading demand is -60. That is, z=-60. Let us also assume that the informed trader submits the trading demand, x, derived in Question 1.

Calculate the dealers price if they follow their equilibrium strategy (p()).

a.

Other

b.

$10.00

c.

$11.82

d.

$9.67

e.

$10.18