The following quotes were observed for Baffit Corp. (ticker: BAFF) on the two dates indicated below. Complete parts a through c. Baffit Corp BAFF Baffit Corp BAFF July 10 July 11 Bid 14.60 Bid 15.07 Ask 14.64 |Ask 15.14 a. Suppose you decide to use a market order to buy 550 shares of BAFF on July 10 and then sell the 550 shares using a market order on July 11. Assuming no brokerage commissions, how much of a gain or loss did you make? (Round to two decimal places.) You made a of b. Suppose you decide to use limit orders instead of market orders. On July 10. you put in a limit order to buy 550 shares of BAFF at $14.62 per share. On July 11, you put in a limit order to sell 550 shares of BAFF at $15.12 per share. Both orders were executed on their respective days. Assuming no brokerage commissions, how much of a gain or loss did you make? (Round to two decimal places.) You made a ofs c. What are the trade-offs between using market orders and limit orders? c. What are the trade-offs between using market orders and limit orders ? are executed instantaneously; it may take some time before a counterparty accepts your or it may be the case that your is never executed. Using you buy at the ask and sell at the bid, so the bid-ask spread is an implied transaction cost. Using you can buy closer to the bid and sell closer to the ask; thus you can avoid much or all of the bid-ask spread as a transaction cost