Question: Question 7 (11 marks) Based on the below market depth information for HSU Corp. Ask Price (S) 3.74 Market Depth - HSU Corp Bid Quantity

Question 7 (11 marks) Based on the below market depth information

for HSU Corp. Ask Price (S) 3.74 Market Depth - HSU Corp

Question 7 (11 marks) Based on the below market depth information for HSU Corp. Ask Price (S) 3.74 Market Depth - HSU Corp Bid Quantity Price (S) 26,000 3.71 29,000 3.70 42,500 3.68 10,700 3.65 8,500 3.64 3.76 Quantity 39,000 33,500 28,200 21,700 11,500 3.77 3.78 3.81 Suppose you are a trader in a leading stock brokerage firm. A client has asked you to purchase 120,000 shares of HSU Corp. a. (3 marks) What will be the average traded price if you decide to trade the entire order immediately? (assume no other transaction costs) b. (2 marks) Is there any market impact on this order? Explain. C. (2 marks) What will the market price be immediately following this trade? d. (2 marks) What alternative strategies may the trader employ in order to attempt to minimize this market impact? e. (2 marks) Suppose the VWAP for HSU Corp for that day was $3.765, how does your VWAP compare with the market VWAP

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