3. Below are the bid and ask prices for a share of XYZ Company, which trades in a dealer market. Bid $30.00 Ask $30.50 a. Suppose you have instructed your broker to buy a share of XYZ. At what price will your trade be executed? b. Suppose you have instructed your broker to sell a share of XYZ. At what price will your trade be executed? c. Suppose you submit a limit order to sell XYZ at $30.70. What will happen? d. Suppose you submit a limit order to buy XYZ at $29.75. What will happen? e. Suppose you submit a limit order to buy XYZ at $30.25. What will happen?
3. Below are the bid and ask prices for a share of XYZ Company, which trades in a dealer market. Bid $30.00 Ask $30.50 a. Suppose you have instructed your broker to buy a share of XYZ. At what price will your trade be executed? b. Suppose you have instructed your broker to sell a share of XYZ. At what price will your trade be executed? c. Suppose you submit a limit order to sell XYZ at $30.70. What will happen? d. Suppose you submit a limit order to buy XYZ at $29.75. What will happen? e. Suppose you submit a limit order to buy XYZ at $30.25. What will happen?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:3. Below are the bid and ask prices for a share of XYZ Company, which trades in a dealer market.
Bid
$30.00
Ask
$30.50
a. Suppose you have instructed your broker to buy a share of XYZ. At what price will your
trade be executed?
b. Suppose you have instructed your broker to sell a share of XYZ. At what price will your
trade be executed?
c. Suppose you submit a limit order to sell XYZ at $30.70. What will happen?
d. Suppose you submit a limit order to buy XYZ at $29.75. What will happen?
e. Suppose you submit a limit order to buy XYZ at $30.25. What will happen?
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