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For ABC stock, the trader at the XYZ Fund believes that if she buys at time t of Qt shares,the average price of the trade

For ABC stock, the trader at the XYZ Fund believes that if she buys at time t of Qt shares,the average price of the trade will be given by: Pt = Pt-1ta +0.0002 x It The most recent price is po = $ 30. XYZ wants to buy 20,000 shares. If a=0.1(that is, the price is moving up).
1)The portfolio manager says that she would like the trade completed in two periods. The trading desk plans to execute equal amounts in each period:10,000,and 10,000,what is the total cost?
2)
The optimal trading quantity in the first period is _____ and the second period is ______. If the trades are optimally sized, the total cost is_____.
A.
10,250; 9,750; 662,987.5
B.
10,350; 9,650; 662,500
C.
10,250; 9,750; 661,950
D.
10,350; 9,650; 662,958.5

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