The following order book exists for a particular stock. The last trade on the st

Question

The following order book exists for a particular stock. The last trade on the stock was at $27.09.

If you place a market buy order for 200 shares, at what price will it be filled? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

If you place a market sell order for 200 shares, at what price will it be filled? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)

The following order book exists for a particular stock. The last trade on the stock was at $27.09.

Explanation / Answer

If you place a market buy order for 200 shares, at what price will it be filled?

Solution-

It will be filled at the lowest asked price, i.e. $27.11 per share.

Note

All shares will trade at this price since the limit-sell order involves 200 shares.

If you place a market sell order for 200 shares, at what price will it be filled?

Solution-

It will be filled at the highest asked price, i.e. $27.08 per share.

Suppose you place a market order to buy 500 shares. At what price will it be filled? Choose the appropriate answer.

Solution-

250 shares at $27.11 and 250 shares at $27.12

Note

All shares will trade at this price since the limit-sell order involves 500 shares.

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