3. Trading (16; 4 points each) Consider the following limit-order book of a specialist. The last trade in the stock took place at a price of $50. Limit-buy Orders Limit-sell Orders Price ($) Shares Price ($) Shares 49.75 500 50.25 100 49.50 800 51.50 100 49.25 500 54.75 300 49.00 200 58.25 100 48.50 600 (a) If a market-buy order for a round lot (100 shares) comes in, at what price will it be filled? (b) At what price would the next market-buy order be filled? (c) Suppose a market order to by 1,000 is submitted. At what price will the order be filled? (d) Suppose you own the stock traded and that you just received valuable inside information about it. You want to trade aggressively to profit from this information. In your opinion, which type of information is more likely to have a large impact on the stock price? Positive information, or negative information? Explain