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19 March, 19:13

You find that the bid and ask prices for a stock are $10.25 and $10.30, respectively. If you purchase or sell the stock, you must pay a flat commission of $25 on each trade. If you buy 100 shares of the stock and immediately sell them, what is your total transaction cost in dollars?

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  1. 19 March, 22:04
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    The total transaction cost is $55.

    Explanation:

    Total cost = number of shares * (Ask price - Bid price) + purchase cost + sell cost

    = 100 * (10.30 - 10.25) + 25 + 25

    = $55

    Therefore, the total transaction cost is $55.
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