One hour ago, Mr. Jones placed a stop sell order to sell 50,000 shares of XYZ stock at the price of $12.20 when the last executed price was $12.50.

Now, the last executed price falls to $12.20. The bid and offer orders of XYZ stock are shown in the table below.

Bid (shares)		Offer(shares)
	$12.5	8,000
	$12.4	23,000
	$12.3	17,000
20,000	$12.2
18,000	$12.1
45,000	$12.0

⦁   Based on the table above, at what price(s) and how many shares will be sold in Mr. Jones’ order? Explain your answer. 

⦁   What is the possible reason that Mr. Jones did not sell the stock at around $12.50 but instead placed the stop sell order to sell at a lower price of $12.20? 

⦁   An index is composed of 5 stocks (A, B, C, D and E). The stock prices of the 5 stocks on day 1 and day 2 are shown below. Suppose the index level on day 1 is 12,356. Calculate the index level on day 2 using price weighted method. (4 marks)

Stock	Price per share $	Number of free-float shares (million)
	Day1 Day2
A	$36.36 $35.97	163
B	$48.36 $47.71	88
C	$48.44 $47.98	42
D	$34.35 $33.42	43
E	$74.32 $72.53	68

⦁   David is not holding any investment at this moment. The stock price of XYZ stock is currently $28 per share. He is very confident that the stock price of XYZ stock will fall very soon. How can David make some profit in this situation? Explain your answer.  

⦁   Further to the previous question, what does David have to do before he places his order?

⦁   Suppose after executing David’s strategy at $28 per share in part D the stock price rises to $32 per share. Calculate the profit/loss per share in dollar amount.