Question: How can one make a profit form a transaction in light of the bid-ask spread, assuming the spread remains constant?

How can one make a profit form a transaction in light of the bid-ask spread, assuming the spread remains constant?

Step by Step Solution

★★★★★

3.58 Rating (166 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Using the above example if you bought at the ask of 26 to make a profit the bid wou... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

768-B-F-F-M (7019).docx

120 KBs Word File

Students Have Also Explored These Related Finance Questions!

Q:

In light of the full disclosure principle, investors and creditors need to know the balances for assets, liabilities, and equity, as well as the accounting policies adopted by management to measure...

Q:

The Legal Environment Dimension In light of the analysis in this case, what option is left to those who believe that terminally ill patientsnot the governmentshould make the decision about whether to...

Q:

1. Incentive to Raise Prices after a Merger. Consider the application Heinz and Beech-Nut Battle for Second Place. Suppose the merger of two firms will reduce the price elasticity of demand for each...

Q:

49. T/F Service companies do not have fixed cost all cost incurred are variable costs 50. T/F Separating cost by behavior fixed and variable a service company can calculate the contribution margin...

Q:

What factors should be considered in deciding whether the cost of capital for a foreign affiliateshould be higher, lower, or the same as the cost of capital for a comparable domestic operation?...

Q:

Post-SOX (Sarbanes-Oxley Act) academic research on internal control focuses on the characteristics of publicly listed companies disclosing material control weaknesses or the consequences experienced...

Q:

Hi, I am doing a project for derivatives class and I have some questions about a regression and Monte Carlo simulation that I need to come up with. So the goal is to hedge against CDS instruments by...

Q:

Case Analysis 1. Compute the yield to maturity of Land'o'Toys' bonds before the purchase announcement and use it to determine the likely current bond rating. (Compare YTM to the table on p. 269)....

Q:

Please Provide a 2 to 3 page article review for each, there attached on this question. Your discussion should include a brief summary (including the big ideas or major points of the article) along...

Q:

Attached are questions you will need to answer based on creating a multinational corperation (MNC). You will need to pick the United States and Germany. The U.S is the home land and Germany is the...

Q:

How do the elements of the specific business environment affect businesses?

Q:

Assuming that the economy shown in the figure below is in equilibrium, calculate the recessionary or inflationary gap in each case below. Price index 400 300 250 N 200 150 350 100 50 200 400 AS Real...

Q:

The following are two independent situations. Sunland Cosmetics acquired 1 5 % of the 2 3 4 , 0 0 0 shares of common stock of Nevins Fashion at a total cost of $ 1 0 per share on March 1 8 , 2 0 2 7...

Q:

If we use a kn-NN rule with kn = n, what would be the resulting error rate in terms of P (0), P (1), P (x|0), and P (x|1)?

Q:

A Treasury bond that matures in 10 years has a yield of 6 percent. A 10-year corporate bond has a yield of 8 percent. Assume that the liquidity premium on the corporate bond is 0.5 percent. What is...

Q:

The real risk-free rate is 3 percent, and inflation is expected to be 3 percent for the next 2 years. A 2-year Treasury security yields 6.2 percent. What is the maturity risk premium for the 2-year...

Q:

The real risk-free rate is 3 percent. Inflation is expected to be 3 percent this year, 4 percent next year, and then 3.5 percent thereafter. The maturity risk premium is estimated to be 0.0005 = (t =...

Q:

What cash payment is equivalent to making payments of $ 8 0 8 . 0 0 at the end of every year for 8 years if interest is 3 % per annum compounded semi dash annually question mark Question content area...

Q:

Mean? Median? Sample standard deviation? aneOnline ? HELP 54 randomly selected students were asked how many siblings were in their family. Let X represent the number of pairs of siblings in the...

Q:

Recording Inventory Purchases and Sales on Account - Note: Round your answers to the nearest whole dollar. c. On January 14 , Shoppers Inc. pays the balance for purchases on account