Consider the following limit order book for a share of stock. The last trade in

Question

Consider the following limit order book for a share of stock. The last trade in the stock occurred at a price of $120 Limit Buy Orders Limit Sell Orders Price Shares 800 1,100 800 200 900 Price Shares 120 120 200 120 $119.75 $120.25 119.50 119.25 119.00 118.50 121.50 124.75 128.25 a. If a market buy order for 120 shares comes in, at what price will it be filled? (Round your answer to 2 decimal places.) Best price b. At what price would the next market buy order be filled? (Round your answer to 2 decimal places.) Next best price c. If you were a security dealer, would you want to increase or decrease your inventory of this stock? Increase Decrease

Explanation / Answer

a. best price=120.25

b.

next best price=121.50

c.

increase

because price is increasing

the above is answer..

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