Question
In: Finance
1. The Frankfurt Stock Exchange has accumulated the following overnight orders: Trader Order Quantity Price Bob...
1. The Frankfurt Stock Exchange has accumulated the following overnight orders:
|
Trader |
Order |
Quantity |
Price |
|
Bob |
Buy |
150 |
30 |
|
James |
Buy |
200 |
27 |
|
Amy |
Buy |
250 |
25 |
|
Julia |
Buy |
180 |
22 |
|
Sam |
Buy |
150 |
18 |
|
Sandy |
Sell |
190 |
17 |
|
Katrina |
Sell |
200 |
21 |
|
Jerry |
Sell |
220 |
25 |
|
Jack |
Sell |
150 |
27 |
The clearing price is set to maximize matched volume. The secondary criterion is to minimize net imbalance. What is the clearing price? What is the matched volume and net imbalance at that price? ( 55 points)
Solutions
Expert Solution
The situation clearly says that the clearing price should be set to maximize the matched volume. If you look at the order window, we can see that the maximum volume of trade can happen at a price of 25. Totally there are 3 bids for 600 units (250+200+150) at a price of 25 or above. Similarly there are 3 offers for 610 units(220+200+190) at a price of 25 or below. So at a price of 25 maximum trade can happen. The second criterion is to have minimum net imbalance. So, the clearing price is 25.
Matched volume at this price is 600.
The net imbalance volume is 600-610= -10.
jeff jeffy answered 2 years agoRelated Solutions
The Frankfurt Stock Exchange has accumulated the following overnight orders: Trader Order Quantity Price Bob Buy...
The Frankfurt Stock Exchange has accumulated the following
overnight orders:
Trader
Order
Quantity
Price
Bob
Buy
150
30
James
Buy
200
27
Amy
Buy
250
25
Julia
Buy
180
22
Sam
Buy
150
18
Sandy
Sell
190
17
Katrina
Sell
200
21
Jerry
Sell
220
25
Jack
Sell
150
27
The clearing price is set to maximize matched
volume. The secondary criterion is to minimize net
imbalance. What is the clearing price? What
is the matched volume and net imbalance at that price?
A stock trader at a brokerage firm has noticed that price changes in the shares of...
A stock trader at a brokerage firm has noticed that price
changes in the shares of Summer House Bakery each trade
are dependent upon the previous trade's price change. Her
observations can be summarized by the following transition matrix.
(We are assuming +1/8, 0, -1/8 are the only possible price changes
for this stock).
Next Price Change
Most Recent Price Change
+1/8
0
-1/8
+1/8
.7
.2
.1
0
.3
.4
.3
-1/8
.2
.1
.7
A) Provide a...
A stock trader at a brokerage firm has noticed that price changes in the shares of...
A stock trader at a brokerage firm has noticed that price
changes in the shares of Summer House Bakery each trade
are dependent upon the previous trade's price change. Her
observations can be summarized by the following transition matrix.
(We are assuming +1/8, 0, -1/8 are the only possible price changes
for this stock).
Next Price Change
Most Recent Price Change
+1/8
0
-1/8
+1/8
.7
.2
.1
0
.3
.4
.3
-1/8
.2
.1
.7
A) Provide a...
A trader has invested equal amounts in Stock A and Stock B and knows the following:...
A trader has invested equal amounts in Stock A and Stock B and
knows the following:
Stock A’s daily average return is 0% and its daily standard
deviation is 2%.
Stock B’s daily average return is 0% and its daily standard
deviation is 3%.
The stocks have a correlation of 0.4.
If returns are assumed to be normally distributed, calculate the
10 day Value-at-Risk (VaR) for this portfolio at the 99% level
1. Use the following information and answer the following: Product Price 2019 Quantity 2019 Price 2020 Quantity...
1. Use the following
information and answer the following:
Product
Price 2019
Quantity 2019
Price 2020
Quantity 2020
Food
$10
1,000
$12
1,200
Clothing
$40
400
$48
500
Education
$100
600
$120
120
Health care
$200
300
$240
360
a. Nominal GDP for 2019 and
2020.
b. Assume 2019 is the base
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c. Real GDP for
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d. Nominal and real rate of
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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.)
1.Which of the following orders instructs the broker to sell at or below a specified price?...
1.Which of the following orders instructs the broker to sell at
or below a specified price?
Select one:
a. Limit-sell order
b. Stop-loss
c. Limit-buy order
d. Stop-buy order
e. Market order
2.Hedge funds may invest or engage in
Select one:
a. distressed firms.
b. convertible bonds.
c. currency speculation.
d. merger arbitrage.
e. All of the options are correct.
3.The smallest component of the fixed-income market is _______
debt.
Select one:
a. Treasury
b. other asset-backed
c. corporate
d....
Kramer and Associates has the following account balances listed in alphabetical order: Accumulated Depreciation, $24,000; Accounts...
Kramer and Associates has the following account balances listed
in alphabetical order: Accumulated Depreciation, $24,000;
Accounts Payable, $9,500, Accounts Receivable, $11,000; Cash,
$4,000; Equipment, $47,000, Land, $23,000, Mortgage Payable,
$46,000; Prepaid Insurance, $7,500; Supplies, $1,000; Unearned
Revenue, $5,000; Wages payable, $2,000. Kramer and Associates'
current liabilities are: A. $11,500. B. $62,500. C. $16,500. D.
$57,500.
Two stocks has the following year-end stock prices and dividends: Stock 1 Stock 2 Year Price...
Two stocks has the following year-end stock prices and
dividends:
Stock 1
Stock 2
Year
Price
Dividend
Price
Dividend
1
$70
$150
2
$75
$1
$163
$2
3
$74
$1
$156
$2
4
$80
$2
$173
$1
Which stock has a higher annual average capital gain yield over
the four years? Which stock has a higher average dividend yield?If
T-bill rate is 2.0 percent, which stock has a higher average
nominal risk premium based on the annual average total return?What...
1. Which of the following statements is true? a. An effective price ceiling reduces the quantity...
1. Which of the
following statements is true? a. An effective price ceiling reduces
the quantity of the good available to consumers, while an effective
price floor increases the quantity of the good available to
consumers.
b. An effective
price floor reduces the quantity of the good available to
consumers, while an effective price ceiling increases the quantity
of the good available to consumers.
c. Government
intervention in markets in the form of effective price ceilings or
price floors increases...
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