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The following is an order book for News Corp shares. Consider the case where there is a limit buy order for 650 shares at $16.59, followed by a limit sell order for 600 shares at $16.55. Based on this information, which of the following statements is correct?

Bid Ask PRICE (S) SIZE PRICE ($) SIZE 16.56 400 16.59 500 16.55 400 16.60 700 16.54 400 16.61 800 16.53 600 16.62 500 16.52 200 16.63 500

Select one answer and give reasons for each:

  1. a) After the initial limit buy order, there will be 150 shares at $16.59 on the bid side of the order book.

  2. b) The subsequent limit sell order will be filled with 400 shares at $16.56 and 200 shares at $16.55.

  3. c) After the two trades, the first buyer will have bought 500 shares at $16.59 and the remaining 150 shares at $16.55.

  4. d) The last traded price would be $16.56.

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Answer #1

Home nert Page Layout Formulas Data Review View dd-Ins Cut Σ AutoSum ー E ゴWrap Text ta copy ▼ B 1 u. ,_a. ars-函Merge & Center, $, % , 弼,8 C Conditional Format CeInsert Delete Format Formatting, as Table w styles. ▼ ㆆ ▼ Sort &Find & 2 ClearFe Select Edting Format Painter Clipboard Alignment Number Cells AE17 AD AE AF AG AH Al Al AK AL AM AN AQ AR BUY LIMIT ORDER: TRADE WILL HAPPEN ONLY IF ASKING PRICE IS LOWER OR EQUAL TO PRICE OF BUY LIMIT ORDER. IN OUR CASE, BUY LIMIT ORDER OF 650 SHARES AT A PRICE OF 16.59 4 THE POSITION IS BID ASK 6 PRICE SIZE 16.59 16.56 650 400 PRICE SIZE 16.59 16.6 500 700 9 10 THERE IS A SELLER WHO WANTS TO SELL 500 SHARES AT 16.59 (ASK PRICE). SO 500 SHARES WILL BE PURCHASED AT 16.59 12 13 14 15 16 17 THE POSITION WILL BE: BID ASK PRICE SIZE 16.59 16.56 PRICE SIZE 16.60 16.61 700 800 150 19 i1 1 İ (EV PE EPS DIV ABNORMAL . APV ROSS i deberk ( MARGIN MONEY al tax . PB ROPİ EVA MVA LEVERAGED BUY SWAP distressBRIGHAN CAP GAIN 福 130% 01:34 s ENG 20-01-2019Home nert Page Layout Formulas Data Review View dd-Ins Cut Σ AutoSum ー E ゴWrap Text ta copy ▼ B า 프 . Ej-., Δ. : r_一 逻锂函Merge & Center. $, % , 弼,8 conditional Format . Cell Insert Delete Format Sort &Find & 2 ClearFe Select Edting Format Painter Formatting, as Table w styles. ▼ ㆆ ▼ Clipboard Alignment Number Cells AE31 AD AE AF AG AH Al Al AK AL AM AN AO AP AQ AR AS 16 17 18 19 20 21 LIMIT SELL ORDER : TRADE WILL HAPPEN ONLY IF ASKING PRICE IS HIGHER OR EQUAL TO PRICE OF SELL LIMIT ORDER. IN OUR CASE, SELL LIMIT ORDER OF 600 SHARES AT A PRICE OF 16.55 NOW THERE ARE 150 SHARES ON BID SIDE AT A PRICE OF 16.59, THE POSITION IS BID ASK 23 24 25 26 27 28 29 30 31 32 PRICE SIZE 16.59 16.56 PRICE SIZE 16.55 16.60 150 400 700 AND SELL LIMIT ORDER AT A PRICE OF 16.55 WHICH IS LOWER THAN BID PRICE, SO 150 SHARES WILL BE SOLD AT 16.55 THE POSITION WILL BE BID ASK PRICE SIZE 16.56 16.55 PRICE SIZE 16.55 16.60 400 450 400 700 34 i1 1 H I ( EV PE EPS DIV ABNORMAL . APV ROSS i deberk ( MARGIN MONEY al tax . PB ROPİ EVA MVA LEVERAGED BUY SWAP distressBRIGHAN CAP GAIN 01:36Home nert Page Layout Formulas Data Review View dd-Ins Cut Σ AutoSum ー E ゴWrap Text ta copy. в 1 프 . Ej-., Δ. : rーー 逻锂函Merge & Center. $, % , 弼,8 C Conditional Format CeInsert Delete Format Formatting as Table Styles2 Clear Sort &Find & Format Painter Clipboard Alignment Number Cells Edting AG46 AD AE AF AG AH Al Al AK AL AM AN AO AP AQ AR ASA 34 35 36 37 38 39 40 41 42 43 SO 400 MORE SHARES WILL BE TRADED AT 16.55, AS BID PRICE IS 16.56 HIGHER THAN ASK PRICE 16.55 THEN 50 MORE WILL BE TRADED AT 16.55, AS BID PRICE ANS ASK PRICE MATCHES THE POSITION WILL BE BID ASK PRICE SIZE 16.55 PRICE SIZE 16.60 350 700 ANSWER: SO c OPTION IS CORRECT LAST TRADED PRICE IS 16.55 SOd IS IN CORRECT 45 46 47 48 49 50 51 52 i1 1 İ (EV PE EPS DIV ABNORMAL . APV ROSS i deberk MARGIN MONEY al tax . PB ROPİ EVA MVA LEVERAGED BUY SWAP distressBRIGHAN CAP GAIN 福 130% 01:39

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