Stella places a market order with her broker to buy 1000 shares of OneWorld Corp.The broker buys 1000 shares at $15.40 each,and sells them to Stella at $15.55 each.He also charges a commission of $12.00.What is bid-ask spread in this case?

Question

Quizplus · Accepted Answer

The cost of buying 1000 shares at $15.40 each is $15,400. The cost of selling 1000 shares at $15.55 each is $15,550. The difference between these two prices is the bid-ask spread, which is:

$15,550 - $15,400 = $150

In addition to the bid-ask spread, the broker also charged a commission of $12.00. Therefore, Stella's total cost is:

$15,550 + $12.00 = $15,562

So, the best choice is D, $150.

Stella Places a Market Order with Her Broker to Buy