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On January 1st you buy 100 shares of ABC at an average price of $250 using a market order. The midpoint of the bid-ask spread

On January 1st you buy 100 shares of ABC at an average price of $250 using a market order. The midpoint of the bid-ask spread for ABC is $249. On March 1st you sell the 100 shares at an average price of $255 with a market order. The midpoint is $256. Assume that the bid-ask spread of ABC is constant and equal to $1.

1. What is the bid-ask spread on this trade?

2. What is the price impact on this trade?

3. What is the return on this trade?

4. What is the return on this trade if you were able to trade at the midpoint?

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