Equity manager indicates to their broker market order

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Reference no: EM131957892

Alaska Permanent Fund Corporation, hypothetically, enacted the following requests and stock purchases:

1. Alaska Permanent Fund Corporation (APFC) equity manager indicates to their broker a market order of

- 20,000 shares of Cisco Systems, Inc., at the current price of $30.54; and

- 100 shares of the Boyd Gaming Corp. at the current price of $20.32.

2. The trade desk releases

- 10,000 shares of Cisco now at $31.23 and

- cannot immediately find a seller of the shares for Boyd Gaming Corp.

3. The APFC broker buys

- 10,000 shares of Cisco Systems, now at $31.54 with a commission of 0.04 per share.

4. A day later, the trade desk found a seller of Boyd Gaming Corp. stock and releases

- 50 shares of Boyd Gaming at the current price of $20.03, and also

- 10,000 shares of Cisco Systems at $31.05

5. The APFC broker buys

- 50 shares of Boyd Gaming Corp., now at $20.15 with a commission of 0.04 per share,

- 4,000 shares of Cisco Systems, now at $31.75 with a commission of 0.04 per share, and

- Cancels the additional 6,000 shares of Cisco Systems in the original order.

6. A week later, current prices for now 14,000 shares of Cisco and 50 shares of Boyd are as follows, consequently:

- $36.61; and

- $19.76.

Evaluate the transaction cost name and attributes of the trades shown, including whether the trades are to the advantage or disadvantage of the Alaska Permanent Fund Corporation.

Reference no: EM131957892

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