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Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $50. a. Is
Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $50. a. Is it possible for 100 shares to be purchased at $49.45 ? b. Is it possible for 100 shares to be purchased at $50.15 ? c. A trader sees the limit order book above, and she sees an opportunity for a good return within the next 5 seconds. To exploit the opportunity, would she place a market order to purchase 300 shares, or sell 300 shares? Explain your reasoning. d. A market order to sell 600 shares comes to the market. Assuming no "price improvement," describe the selling price(s) per share. e. A market order to buy 600 shares comes to the market. Assuming no "price improvement," describe the selling price(s) per share. f. If you were the dealer asking $50.25 for 100 shares, would you feel comfortable with that ask price and keep the quote alive, or would you want to immediately cancel the order. Explain your reasoning
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