Question

The order book has two 200 share bids at $74.50 and two 300 share offers at...

The order book has two 200 share bids at $74.50 and two 300 share offers at $75.15.

Describe what happens if: You enter a limit order to buy 300 shares at $74.85.

Group of answer choices

Buy at 75.15 to pay 22,545

Buy at 74.50 to pay 22,350

Not executed; Entered on the Ask side as the best offer

Not executed; Entered on the Bid side as the best bid

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Answer #1

LIMIT ORDER TO BUY : implies that you want to buy shares at desired price = 74.85

As best ask rate 75.15 and your bid rate = 74.85, transaction will not be executed but as your rate is more attractive than placed by a person for 200 shares at 74.50, your bid will appear as first bid or best bid

Answer : Not executed; Entered on the Bid side as the best bid

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