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dedylja [7]
3 years ago
5

A stock market is a public market for trading a company's stocks and derivatives. The bid-ask spread in a dealer market represen

ts the profit that a dealer would make on a transaction involving a security. Which of the following statements best describes the bid-ask spread? The difference between the closing price of the security and the opening price of the security on the day of the transaction. The difference between the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it. The sum of the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it. Erik, a trader, wants to buy 1,000 shares of XYZ stock, while a second trader, Alison, is willing to sell 1,500 shares of the same stock. Unfortunately, Erik and Alison don't know one another and must complete their transactions using the stock exchange's market-making dealer. XYZ's market maker is willing to sell her shares for $30.65 per share and purchase additional shares for $30.25 per share. Select the most appropriate values in the following table: Term Bid price Ask price Bid-ask spread Value $30.25 $30.65 $0.40 If the market maker is willing to purchase the entire block of 1,500 shares from Alison and, from that block, resell 1,000 shares to Erik, then the market maker's net profit from Erik's transaction-excluding any inventory effects-will be_______.
Business
1 answer:
Elena L [17]3 years ago
3 0

Answer: The difference between the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it.

Net profit = $400

Explanation:

The bid ask spread is the difference between the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it.

From the question, we have been given the following information:

Bid price = $30.25

Ask price = $30.65

Bisk ask spread = Ask price - Bud price

= $30.65 - $30.25

= $0.40

Net profit = $0.40 × 1000

= $400

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raketka [301]

Answer:

c. 0.25

Explanation:

Cross-price elasticity = [(Q2-Q1/)((Q1-Q2)/2) * 100] / [(P2-P1/)((P1-P2)/2) * 100]

Cross-price elasticity = [(65-55)/((65+55)/2)*100] / [(2-1)/((1+2)/2)*100]

Cross-price elasticity = 16.6667/66.6667

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8 0
2 years ago
A business will construct its financial statements in a particular order because they are interrelated. This means that items fo
Blizzard [7]

Answer: d. Net income is part of the computation for ending retained earnings.

Explanation:

In the statement of owner's equity, Retained earnings are calculated and it is done with the Net Income. This is why when the net income is calculated from the Income Statement it is transfered to the SOE and used to calculate Retained Earnings.

Retained Earnings are calculated by the formula,

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7 0
3 years ago
g For this question, ignore inflation. Suppose Jenny earns $60,000 per year working as a tax analyst. After ten years, she quits
arsen [322]

Answer:

If Jenny doesn’t earn any interest on her savings and wants to perfectly smooth consumption across her life, how much will she consume every year?

Jenny's total income during her life = income as tax analyst ($60,000 x 10) + income as PhD student ($12,000 x 5) + income as Art Director (35 x $95,000) = $3,985,000

she generated income during 50 years and expects to live 20 more, so in order to perfectly smooth consumption across her life, she must divide her total life income by 70 years = $3,985,000 / 70 years = $56,928.57 per year

What might prevent her from perfectly smoothing consumption?

First of all, besides inflation, you also earn interest on your savings. That is why 401k and other retirement accounts work so well (the magic of compound interest). Even if inflation and interests didn't exist, you cannot know exactly what you are going to earn in the future and for how many years. In this case, she earned $60,000 for 10 years, but then earned only $12,000 during 5 years. If she really wanted to smooth her consumption, she would have needed to get a loan because her savings during the first 10 years wouldn't be enough.

4 0
2 years ago
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timofeeve [1]

Answer:A) one year

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6 0
3 years ago
Why is it difficult for some people to save money?
sammy [17]
If they have alot of money then it might be hard for them to save because they have enough or if they  dont have alot of money then they just wanna have alot of items i do that sometimes☺


8 0
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