On a given day a stock dealer maintains a bid price of $1,000.50 for a bond...

On a given day a stock dealer maintains a bid price of $1,000.50 for a bond and an ask price of $1002.75. The dealer made 10 trades that totaled 600 bonds traded that day. What was the dealer's gross trading profit for this security?

1,950

1,350

1,425

1,180

Solutions

Expert Solution

Bid Price= $1000.50

Ask Price= $1002.75

Bid - Ask Spread = 1002.75 - 1000.50 = 2.25

Total number of Bonds = 600

Dealer's gross trading profit = 2.25 * 600 = $1350 (2nd option will be the answer)

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

A dealer quotes a bid price of $130 and an ask price of $131 for every share of Apple stock.

A dealer quotes a bid price of $130 and an ask price of $131 for every share of Apple stock. If you sell an Apple share to this dealer, at what price will you sell? $140.2 $131 $140.1 $130

A stock has a bid price of £80.45 and an ask price of £80.55.Suppose you...

A stock has a bid price of £80.45 and an ask price of £80.55. Suppose you shortsell 400 shares of this stock, and then cover the position 6 months later, when the bid and askprices are £78.15 and £78.25. Assume you pay 0.3% brokerage fee on each transaction. Also,assume that you invest the short sale proceeds for the 6 months at 3% per annum interest ratewith semi-annual compounding. What is your profit?

the arizona stock exchange lists a bid price of 1.21 and ask price of 1.40 for...

the arizona stock exchange lists a bid price of 1.21 and ask price of 1.40 for company z . what what price can you buy the stock and what is the dealer bid ask spread? a. 1.40 and bis ask spread is 0.18. b. 1.40 and bid -ask price spread is 0.19 c. 1.21 and bid- ask price spread is 0.18 d. 1.21 and bid ask price spread is 0.19

Today’s stock price is 80, 90-dollar call, on the expiration day, stock price is 85. Price...

Today’s stock price is 80, 90-dollar call, on the expiration day, stock price is 85. Price of the call is 2. What is the value of the call on the expiration day? What is the next profit for the buyer? What is the net profit for the seller? Will the options be used?

Consider the following limit order book for a share of stock. Bid Ask Price Shares Price...

Consider the following limit order book for a share of stock. Bid Ask Price Shares Price Shares $79.75 500 $79.80 500 79.70 900 79.85 400 79.65 700 79.90 900 79.60 1000 79.95 700 78.65 600 a. If a market sell order for 1200 shares comes in, at what price(s) will it be filled? from low to high b. Immediately after the order in a) is executed, what is the bid-ask spread of the stock? (Keep two decimal places.)

Is the Federal Reserve focused on day-to-day movements in stock and bond prices? Why or why...

Is the Federal Reserve focused on day-to-day movements in stock and bond prices? Why or why not? Do not exceed 200 words

Given the following bond quote: Maturity Date:8/15/2039 Coupon Rate: 4%, semi-annual payments Bid Price: 158% of...

Given the following bond quote: Maturity Date:8/15/2039 Coupon Rate: 4%, semi-annual payments Bid Price: 158% of par Ask Price: 158.25% of par Change: 0.4688% Part A: Calculate the price an investor would pay to acquire $85,000 of par value in this bond. Part B: Calculate the price an investor would receive for selling $60,000 of par value in this bond

EuroUSA Bank (a fictitious name) is a dealer in the currency market. It posts bid prices...

EuroUSA Bank (a fictitious name) is a dealer in the currency market. It posts bid prices for euros of $1.5000 and ask (or offer) prices for euros of $1.5010 in three months’ time. The following companies decide to trade forward contracts with the EuroUSA bank at the above prices. All payments are due in three months. A US company has bought a machine worth 3 million euros from a German manufacturer. A French company will buy 1.5 million euros worth...

The random walk model suggests that day-to-day changes in the price of a stock should have...

The random walk model suggests that day-to-day changes in the price of a stock should have a mean value of zero, how do you test the random walk hypothesis?

The random walk model suggests that day-to-day changes in the price of a stock should have...

The random walk model suggests that day-to-day changes in the price of a stock should have a mean value of zero, how do you test the random walk hypothesis?

Subjects