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21 September, 15:13

You would like to buy shares of International Business Machines (IBM). The current bid and ask quotes are $103.25 and $103.30, respectively. You place a market buy-order for 200 shares that executes at these quoted prices. How much money did it cost to buy these shares? a. $10,330.00 b. $20,650.00 c. $20,660.00 d. None of the options

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  1. 21 September, 18:58
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    c. $20,660.00

    Explanation:

    The current bid and ask quotes are quotes on a single share of stock. The bid price is the price at which buyers are willing to buy a stock while the ask price is the price sellers are willing to sell a stock.

    If you would like to buy shares of International Business Machines (IBM), you will do so at the ask price;

    Hence cost of shares

    = 200 * $103.30

    = $20,660
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