Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kevin is convinced that the Stock A will perform very poorly over the coming months. He is considering shorting 200 shares of Stock A. To

image text in transcribed
image text in transcribed
Kevin is convinced that the Stock A will perform very poorly over the coming months. He is considering shorting 200 shares of Stock A. To enter this short position, you suggest that he borrows the shares from your bank and sells them right away. The limit order book of Stock A on Sept. 22, 2022 (9;00am) is the following: Question 5-Limit Order Book: a) Given the above limit order book, how.much would Kevin be able to cash in if he places a market order to sell the 200 shares on Sept. 22, 2022 at 9:00am? (Given that Kevin is a new potential client, you do not want to charge him for borrowing costs) On September 22,2022 (1:00pm), the limit order book is the following: limit order book (Sept. 22, 2022 - 1:00pm) b) If the transaction of the limit order book is executed at 1:00pm, how much would have Kevin saved by placing a limit sell order at $6.0 instead of a market order at 09:00am

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Profit First For Lawn Care And Landscape Businesses

Authors: Christeen Era, Steven A Rigolosi, Mike Michalowicz

1st Edition

0578908158, 978-0578908151

More Books

Students also viewed these Finance questions

Question

1. Identify three approaches to culture.

Answered: 1 week ago

Question

2. Define communication.

Answered: 1 week ago