A stock has bid price of $30 and ask price of $30.25. Suppose there is a $10 brokerage commission.
a) Determine the bid-ask spread?
b) At what price can you purchase this stock? c)At what price can you sell this stock?
d) At what price can a market-maker sell this stock? e) At what price can a market-maker sell this stock?
f) What amount will you pay to buy 100 shares?
g) What amount will you receive for selling 100 shares?
h) Suppose you buy 100 shares, then immediately sell them. What is your round-trip transaction cost?