Consider the following limit-order book of a market maker. The last trade in the stock took place at a price of $96.

Limit-Buy Orders Limit-Sell Orders

Price Shares Price Shares

$95.75 500 $96.25 200

95.50 500 96.50 300

95.25 500 99.75 300

95.00 300 103.25 100

94.50 1,000

a. If a market-buy order for 400 shares comes in, at what price will it be filled?

b. If a market-sell order for 400 shares comes in, at what price will it be filled?

c. What is the inside bid-ask?

d. What is the effective bid-ask spread when buying 500 shares?