Question

Selma wants to pay no more than $50 for a share of stock. The bid ask...

Selma wants to pay no more than $50 for a share of stock. The bid ask spread is $49 - $51. Selma should _________.

A place a market order at the dealer’s bid price

B place a limit buy order with limit price = $51

C place a limit buy order with limit price = $50

D place a market buy order

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

If she wants to purchase the stock at $50 then she should be putting the limit order buy at $50 because limit order buy will only execute the buy order if the price is reaching the limit order , else the order will not be executed, so since she wants to pay no more than $50 she should be trying to place a limit buy order with a limit price of $50.

All the other options regarding Market buy order are false.

Correct answer will be option ( C) place a limit buy order with limit price = $ 50.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
For Tesla stock, you have the following limit order book: bid ask Price Size Price Size...
For Tesla stock, you have the following limit order book: bid ask Price Size Price Size 400.78 1000 400.85 400 400.77 200 400.86 1000 400.76 5000 400.87 900 400.75 300 400.88 5000 If you place a market buy order of 500 shares, what is your purchase price? If you place a limit buy order of 500 shares at $400.84, given the limit order book, how many shares can you purchase? What is the bid-ask spread if you place a market...
Consider the following limit order book for a share of stock. Limit Buy Orders Limit Sell...
Consider the following limit order book for a share of stock. Limit Buy Orders Limit Sell Orders Price Shares Price Shares $49.75 500 $49.80 100 49.70 900 49.85 100 49.65 700 49.90 300 49.60 400 49.95 100 48.65 600 a. If a market buy order for 300 shares comes in, at what price(s) will it be filled? Fill in execution prices from low to high (may not use all boxes) b. Immediately after the order in a) is executed, what...
A stock has the following quotes: Bid: $23.65 Ask: $23.80 A.) If you set a market...
A stock has the following quotes: Bid: $23.65 Ask: $23.80 A.) If you set a market order to buy, will your trade be executed? If so, at what price? B.) If you had set a stop loss at $23.70, will your trade be executed? If so, at what price? C.) If you set a limit order to buy at $23.85, will you trade be executed. If so, at what price? D.) If you set a limit order to sell at...
the market maker for stock a observes that at the current bid and ask price, her...
the market maker for stock a observes that at the current bid and ask price, her inventory is getting to low. what should she do to bring it back up? (a) raise the bid and raise the ask (b) raise the bid and lower the ask (c) lower the bid and raise the ask (d) lower the bid and lower the ask
the market maker for stock a observes that at the current bid and ask price, her...
the market maker for stock a observes that at the current bid and ask price, her inventory is getting to low. what should she do to bring it back up? (a) raise the bid and raise the ask (b) raise the bid and lower the ask (c) lower the bid and raise the ask (d) lower the bid and lower the ask
1. Martin Corp. stock has a bid price of $38.10 and an ask price of $38.35....
1. Martin Corp. stock has a bid price of $38.10 and an ask price of $38.35. Assume there is a $19 brokerage commission per trade. What is your round-trip transaction cost if you buy 100 shares and then immediately sell 100 shares? A) $44 B) $63 C) $13 D) $25 E) $6 1 points 2) Suppose a security has a bid price of $39.50 and an ask price of $39.80. At what price can you sell the security to a...
3. You purchased 100 shares of JNJ stock at $50 per share. The stock is currently...
3. You purchased 100 shares of JNJ stock at $50 per share. The stock is currently selling at $45. You would like to lock up your total loss to no more than $700. Which of the following action will help you? OPTIONS; A. place a stop-buy order at $57 B. place a stop-loss order at $43 C. place a limit buy order at $53 D. place a limit sell order at $47 E. none of the above 4. Which of...
The bid-ask spread for Gopple Inc. is 3 cents. This means A. An investor doing a...
The bid-ask spread for Gopple Inc. is 3 cents. This means A. An investor doing a stock round trip will lose 3 cents per stock B. Dealer makes 6 cents when they buy and sell a stock. C. The current price is 3 cents more than the opening price today D. DMM sells to investors at 3 cents more than yesterday's closing price 12. You can buy shares in non-US companies in the US markets through which instrument A. Preferred...
Suppose that the bid price of Google stock is $497 per share and the ask price...
Suppose that the bid price of Google stock is $497 per share and the ask price is $501 per share. Google does not pay any dividends. Short selling the stock is feasible at zero cost. You can borrow at an annual rate of 5.5 and lend at 4.0% (simple compounding). The commission of closing a forward position is $0.8 per share. What is the highest forward price that will not allow arbitrage? Please round to two decimal places. Answer is...
MSFT BID ASK SHARES PRICE SHARES PRICE 500 168.50 200 170.50 200 168.00 300 170.80 350...
MSFT BID ASK SHARES PRICE SHARES PRICE 500 168.50 200 170.50 200 168.00 300 170.80 350 167.50 450 171.30 600 167.35 200 172.00 150 166.90 1,000 172.50 Above is the book for MSFT. You are planning to buy 300 shares of the MSFT stock at the market price. What will be your average purchasing price? What is the bid-ask spread after your purchase? A. $170.60; $2.3 B. $170.60; $2.8 C. $170.68; $2.0 D. $170.68; $2.3
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT