Problem 5-3 Order Books (LO2, CFA1)

The following order book exists for a particular stock. The last trade on the stock was at $55.63.

Buy Orders				Sell Orders
Shares		Price		Shares		Price
250		$55.62		100		$55.65
250		55.61		600		55.66
900		55.60		1,000		55.68
150		55.58		850		55.69
				600		55.70

a. If you place a market buy order for 100 shares, at what price will it be filled? (Round your answer to 2 decimal places.)

b. If you place a market sell order for 100 shares, at what price will it be filled? (Round your answer to 2 decimal places.)

c. Suppose you place a market order to buy 300 shares. At what price will it be filled? Choose the appropriate answer.

• 100 shares at $55.70 and 200 shares at $55.69

• 300 shares at $55.63

• 100 shares at $55.65 and 200 shares at $55.66

• 300 shares at $55.70