Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
15th Edition
ISBN: 9780134476315
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
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Textbook Question
Chapter 2, Problem 2.1P
Transaction costs You would like to purchase one Class A share of Berkshire Hathaway through your Scottrade brokerage account. Scottrade charges a $7 commission for online trades. You log into your account, check the real-time quotes for Berkshire Hathaway (you see a bid price of $262,850 and an ask price of $263,770) and submit your order.
- a. What is the current bid/ask spread for Berkshire Hathaway Class A shares?
- b. If Scottrade routes your buy order to the NYSE, where Berkshire Hathaway is listed, what’s the potential minimum your total transaction costs will be?
- c. If, instead, Scottrade routes your buy order to the Nasdaq, where Berkshire Hathaway is not listed, what’s the potential maximum your total transaction costs will be?
- d. Regardless of how your trade is executed, based on the bid/ask spread what is the market value of your trade?
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Transaction costs You would like to purchase one Class A share of Berkshire Hathaway through your TD Ameritrade brokerage account. TD Ameritrade advertises a $5 commission for trades using their phone-based interactive voice response system. You call and learn that the bid price is $262,850.00 and the ask price is $263,770.00, and you submit your order for one share.
a. The current bid/ask spread for Berkshire Hathaway Class A shares is $.......?(Round to the nearest cent.)
b. If TD Ameritrade routes your buy order to the NYSE, the potential minimum for your total transaction costs is $........? (Round to the nearest dollar.)
c. If TD Ameritrade routes your buy order to NASDAQ, the potential maximum for your total transaction costs is $..........? (Round to the nearest cent.)
d. Regardless of how your trade is executed, based on the bid/ask spread, the market value of your trade is $..........? (Round to the nearest cent.)
NEED ALL QUEST....
You would like to purchase one ClassA share of Berkshire Hathaway through your TD Ameritrade brokerage account. TD Ameritrade advertises a $5 commission for trades using their phone-based interactive voice response system. You call and learn that the bid price is $285,705.59 and the asking price is $285,909.62 , and you submit your order for one share.
a. The current bid/ask spread for Berkshire Hathaway Class A shares is $________ (Round to the nearest cent.)
b. If TD Ameritrade routes your buy order to the NYSE, the potential minimum for your total transaction costs is $________ (Round to the nearest dollar.)
c. If TD Ameritradevroutes your buy order to NASDAQ, the potential maximum for your total transaction costs is $________ (Round to the nearest cent.)
d. Regardless of how your trade is executed, based on the bid/ask spread, the market value of your trade is $________ (Round to the nearest cent.)
You would like to sell 220 shares of Echo Global Logistics, Inc. (ECHO). The current ask and bid quotes are $15.44 and $15.39, respectively. You place a limit sell order at $15.43.If the trade executes, how much money do you receive from the buyer?
Chapter 2 Solutions
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Ch. 2.1 - What are financial institutions? Describe the role...Ch. 2.1 - Prob. 2.2RQCh. 2.1 - Describe the role of commercial banks, investment...Ch. 2.2 - What role do financial markets play in our...Ch. 2.2 - Prob. 2.5RQCh. 2.2 - Prob. 2.6RQCh. 2.2 - Prob. 2.7RQCh. 2.2 - Describe the role of capital markets from the...Ch. 2.3 - Prob. 2.9RQCh. 2.3 - Prob. 2.10RQ
Ch. 2.4 - What is the difference between an angel investor...Ch. 2.4 - Prob. 2.12RQCh. 2.4 - Prob. 2.13RQCh. 2.4 - Prob. 2.14RQCh. 2.5 - Prob. 2.15RQCh. 2.5 - What is a mortgage-backed security? What basic...Ch. 2.5 - Prob. 2.17RQCh. 2.5 - Why do falling home prices create an incentive for...Ch. 2.5 - Why does a crisis in the financial sector spill...Ch. 2 - In the chapter opener, you read about the...Ch. 2 - Transaction costs Assume that you use a TD...Ch. 2 - Prob. 2.1WUECh. 2 - Prob. 2.2WUECh. 2 - Prob. 2.3WUECh. 2 - Prob. 2.4WUECh. 2 - Prob. 2.5WUECh. 2 - Your broker calls to offer you the investment...Ch. 2 - Transaction costs You would like to purchase one...Ch. 2 - Transaction costs In late December you decide, for...Ch. 2 - Initial public offering On April 13, 2017, Yext...Ch. 2 - Initial public offering A Brazilian company called...Ch. 2 - Prob. 2.5PCh. 2 - Prob. 1SECh. 2 - Integrative Case 1 Merit Enterprise Corp. Sara...
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