"A market maker enters a quote of $20.50 Bid; $21.00 Ask; with a size of "5 x 5" into the NASDAQ System. If a market order to bu

Question

3 years ago

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"A market maker enters a quote of $20.50 Bid; $21.00 Ask; with a size of "5 x 5" into the NASDAQ System. If a market order to bu

y is entered into the system for 1,500 shares, and this dealer's quote is matched, the market maker will be obligated to sell:"

Business

1 answer:

belka [17] · Answer 1 · 2022-02-20T23:02:29+03:00

Answer: 500 shares at $21.00

Explanation:

A market maker is one who buys and then sells security from which the stated market is made into, and using the account of the the firm. It should be noted that a market order to buy will have to be matched in sequence.

Therefore, if a market order to buy is entered into the system for 1,500 shares, and this dealer's quote is matched, the market maker will be obligated to sell 500 shares at $21.00.