Consider the following limit order book for FinTrade stock. The last trade in the stock occurred at a price of $50.
Limit Buy Orders(Bid)
Limit Sell Orders(Ask)
Price
Shares
Price
Shares
$ 49.75
100
$ 49.80
400
49.70
200
49.85
900
49.65
100
49.90
300
49.60
200
49.95
600
48.65
250
50.05
900
a. If a market sell order for 150 shares comes in, will it be filled immediately? At what price will it be filled? If not, please describe the situation and explain why. (Round your answer to 2 decimal places.)
b. If a limit sell order for 150 shares at the price of 49.78 comes in, will it be filled immediately? At what price will it be filled? If not, please describe the situation and explain why. (Round your answer to 2 decimal places.)
c. Based on the current order book structure, Bill expects the stock price will go down. Is it a reasonable expectation? Explain why.
d. Suppose a moderate volume of market buy order or a market sell order having the same size comes in, which one do you think will cause a larger stock price change? Explain why.