INVESTEMENTS (LL) W/CONNECT <CUSTOM>
11th Edition
ISBN: 9781264263554
Author: Bodie
Publisher: MCG
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Chapter 3, Problem 13PS
Summary Introduction
Adequate information
The bid price of Marriott share is $67.95 and the ask price stands to be $68.05. The limit order for sale of Marriott share stands to be $68.
To determine:
What instruction investor has given to the broker .Whether the order will get executed.
Introduction:
Bid ask spread reflects the difference between the prices cited for immediate purchase and sale of currency pairs, options, future contracts or stocks.
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Students have asked these similar questions
Reference the options chain for Caterpillar, Inc. (ticker: CAT) shown below. You sold one contract
of the $115 strike call. What is your max profit? State your answer in total dollar terms (i.e., total
out-of-pocket cost not factoring transaction costs), not contract-level terms. Your answer should
be a dollar amount with two decimal places of accuracy.
(Note on viewing table below: You may have to use a horizontal scrollbar to see all of the columns
in the table below.)
CAT Option Chain
Month: Nov 2020
Calls
Last Change Bid Ask Volume
12.40
11.75
10.05 +0.74
14.80 15.45
12.05 12.65
9.75 10.10
Open
Int.
7.70 +1.70 7.70 8.10 2
Strike
Puts
Last Change Bid Ask Volume
32 100.00 10.70 -0.27 10.55 10.90 12
154 105.00 13.00 -0.65 12.85 13.25 28
10 211 110.00 15.54
622 115.00 18.64
15.50 15.95
18.40 18.95
Open
Int.
426
403
308
292
Rank the following goods, according to how much their present price responds to
expected future prices. (1-most responsive; 4=least responsive). Hint: You should
think about the relative costs of storing the good, and the ease of buying and selling
it (liquidity) because both help to determine the feasibility of adjusting the timing of
purchases and sales.
<
Iron.
Stocks.
Apples.
Gold.
Assume that markup is based on selling price. Find the dollar markup and percent of markup on selling price.
Note: Round your "Dollar markup" answer to the nearest cent and "Percent markup on selling price" to the nearest tenth percent
$
Selling
price
15.40 $ 52.00
Cost
Dollar
markup
Percent markup on
selling price
%
Chapter 3 Solutions
INVESTEMENTS (LL) W/CONNECT <CUSTOM>
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