Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $135. Limit Buy
Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $135.
Limit Buy Orders | Limit Sell Orders | |||
Price | Shares | Price | Shares | |
$134.75 | 600 | $135.25 | 200 | |
134.50 | 900 | 136.50 | 200 | |
134.25 | 600 | 139.75 | 400 | |
134.00 | 200 | 143.25 | 200 | |
133.50 | 700 | |||
|
a. If a market buy order for 200 shares comes in, at what price will it be filled? (Round your answer to 2 decimal places.)
Best price $
b. At what price would the next market buy order be filled? (Round your answer to 2 decimal places.)
Next best price $
c. If you were a security dealer, would you want to increase or decrease your inventory of this stock?
Increase | |
Decrease |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started