Question

You would like to buy shares of International Business Machines (BM). The current bid and ask quotes are $103.25 and $103.30, respectively You place a market buy-order for 200 shares that executes at these quoted prices. How much money did it cost to buy these shares?
a. $10,330.00
b. $20,650.00
c. $20,660.00
d. None of the options

Answer 1

Answer:

c. $20,660.00

Explanation:

Given that

Current bid price = $103.25

Ask price = $103.30

Number of shares = 200 shares

By considering the above information, the amount of money for buying these shares would be equal to

= Number of shares × ask price

= 200 shares × $103.30

= $20,660

Since the shares are of buy market order, so we consider the ask price only, instead of the current bid price