Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 3: Order Boot Consider the following limit order book for FinTrade stock. The last trade in the stock occurred at a price of $50.

image text in transcribed
Problem 3: Order Boot Consider the following limit order book for FinTrade stock. The last trade in the stock occurred at a price of $50. a. If a market buy order for 100 shares comes in, at what price will it be filled? b. At what price would the followingext market buy order be fllled (thint: This question is Io ask you what wili happen when the next market buy order comes after the situation in question (a) happened)? c. If you were a security dealer, would you want to increase or decrease your inventory of this stock? (Hint consider the buying pressure (number of orders) vs the selling pressure. A security dealer is the market maker who is the counterparty trading with all the traders (including both market order trader and limited order traders etc) to provide

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

Step: 3

blur-text-image

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

The Ascendancy Of Finance

Authors: Joseph Vogl, Simon Garnett

1st Edition

1509509305, 978-1509509300

More Books

Students also viewed these Finance questions

Question

19. Describe an EKP and explain its significance.

Answered: 1 week ago