Consider the following limit-order book of a specialist. The last trade in the stock occurred at a
Question:
a. If a market buy order for 100 shares comes in, at what price will it be filled?
b. At what price would the next market buy order be filled?
c. If you were the specialist, would you want to increase or decrease your inventory of thisstock?
Transcribed Image Text:
Limit Buy Orders Limit Sell Orders Shares 500 800 500 200 600 Price Price Shares 100 100 300 100 $49.75 49.50 49.25 49.00 48.50 $50.25 51.50 54.75 58.25
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a The buy order will be filled at the best limitsell order price 5025 b The next mark...View the full answer
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