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With reference to the following limit order book information for Commonwealth Bank of Australia (CBA) obtained from the ASX: Bid quantity Bid price ($) Ask

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With reference to the following limit order book information for Commonwealth Bank of Australia (CBA) obtained from the ASX: Bid quantity Bid price ($) Ask price ($) Ask quantity 1,934 73.690 73.700 5,511 4,395 73.680 73.710 1,297 803 73.670 73.720 3,221 681 73.660 73.730 2,636 711 73.650 73.740 1,501 520 73.630 73.750 752 (a) Clearly explain the information contained in the limit order book. [3 marks] (b) Describe how trading of ASX-listed equities takes place. Make sure you distinguish between limit and at-market orders in your answer, and the advantages and disadvantages of each type of order. [5 marks) (c) Explain how the following orders would be processed, and the impact they would have on the limit-order book: (i) An at-market order to buy 1,000 CBA shares. [2 marks] (ii) An order to sell 5,000 CBA shares at $73.71. [2 marks)

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