Reference no: EM133004708

Consider the following limit-order book for a share of stock. The last trade in the stock occurred at a price of $50.

Limit buy orders Limit sell orders
Price Number of Shares Price Number of shares
$49.75 500 $50.25 100
$49.50 800 $51.50 100
$49.25 500 $54.75 300
$49,00 200 $58.25 100
$48.50 600 - -

a) If a market buy order for l00 shares arrives, at what price will it be filled?

b) Assuming that no new limit orders are placed, at what price would a market buy order of 200 shares be filled?

c) Based on the information in the above table, would you want to increase or decrease your holdings of this stock in the short-term?