Exchange trading and over-the-counter trading of securities

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1. Explain the difference between exchange trading and over-the-counter (OTC) trading of securities. Discuss the relative benefits for investors of the two forms of trading.

2. Selling Stock with a Limit Order You would like to sell 300 shares of International Business Machines (IBM). The current bid and ask quotes are $96.25 and $96.18, respectively. You place a limit sell-order at $96.21. If the trade executes, how much money do you receive from the buyer?

3. Zero Coupon Bond Price Calculate the price of a zero coupon bond that matures in 8 years if the market interest rate is 7.50 percent. (Round your answer to 2 decimal places.)

Reference no: EM132005732

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