How many stocks left in your inventory after the first day

Assignment Help Financial Accounting
Reference no: EM132997984

Question - You are one of the market makers in the stock of a new smartphone company. You quote a bid of 49 ¼ and an ask of 49 ½. Since this is your first day, you have a zero inventory.

(a) Suppose that you receive market sell orders for 5000 shares and market buy orders for 3000 shares. How much do you earn on the 3,000 shares that you sold and bought? How many stocks left in your inventory after the first day?

(b) Before trading begins on the second day, the company announces new smartphone will be delayed. As a result, the quoted bid and ask declined to 45 ¼ and 45 ½. During that day you receive market sell orders for 3000 shares and buy orders for 5000 shares. What is the total profit or loss over the two-day period? How many stocks left in your inventory?

(c) What is a marker maker's objective? Is there anything you could have done during the first day, consistent with a market maker's objective that would have improved your performance over the two-day period?

Reference no: EM132997984

Questions Cloud

Calculate the size of extra payment made exactly one month : Calculate the size of the extra payment made exactly one month after the last full payment of $4323 to the nearest cent. If there is no extra repayment needed
How small can the unit revenue be : How small can the unit revenue be before the watches cease to be profitable
Determine the business wacc at january this year : At 31 January this year, the shares were quoted at $1.21 per share, Determine the business's WACC at 31 January this year
Calculate the level monthly repayment zax will need : Calculate the level monthly repayment Zax will need to make in order to repay the loan fully after exactly 20 year to the nearest cent.
How many stocks left in your inventory after the first day : Suppose that you receive market sell orders for 5000 shares and market buy orders for 3000 shares. How many stocks left in your inventory after the first day
Discuss whether employees should be recognised as an asset : In light of the Conceptual Framework discuss whether employees should be recognised as an asset or expense in the financial statements of Lamenting Ltd.
Which assertion related to accounts receivable : Which assertion related to accounts receivable is the risk of material misstatement likely to be greatest? Give appropriate reasons for the selected assertion
Calculate the fixed overhead expenditure and fixed overhead : Calculate the fixed overhead expenditure and fixed overhead production volume variances. Fixed manufacturing overhead was budgeted at $20 per machine hour.
What entry should Blossom make : Blossom Company accepted a Visa card in payment of a $100 lunch bill. The bank charges a 4% fee. What entry should Blossom make

Reviews

Write a Review

Financial Accounting Questions & Answers

  Which partnership that has general and limited partners

A partnership that has general and limited partners, where the limited partners have no personal liability beyond the amounts they invest in the partnership is

  Determine prepare the adjusting entry at december

Prepare the adjusting entry at December 31, 2019. The bank loan bears interest at 6% per year. It was obtained on April 1, 2019. Payment in full is due on March

  Prepare journal entries for august

Introduction to QuickBooks: Journal Entries for Merchandising Activities: Prepare journal entries. Be sure all dates agree with problem and are not today's date

  Prepare cost of production

Prepare cost of production, cost of goods sold, and inventories schedules for next (the first) month. Assume you are starting new business involving manufacture

  Differences between simple interest and compound interest

What are the differences between simple interest and compound interest? What considerations do you need to take when considering "time value of money"

  Retained earnings account reflects the account balance

The balance in the retained earnings account reflects the account balance before temporary accounts are closed. In addition the notes payable balance includes notes payable of 20,500 due within the next year and 87500 of notes payable that are not du..

  How were accounting practices involved

What was the nature of the controversy regarding this company’s practices? How were accounting practices involved?

  Solve weighted average number of shares for sonic ltd

Calculate the weighted average number of shares outstanding for 2020 if all dilutive securities are converted into ordinary shares at the beginning of the year

  Prepare the cash flows from operating activities section

Riverbed Company reported 2020 net income. Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

  What is the bond nominal coupon rate

Their nominal annual yield to maturity is 6.5%, they pay interest semiannually, and they sell at a price of $888.96. What is the bond's nominal coupon rate

  Understanding of accounting standards and principles

What do you believe your response should be in this situation and develop a thorough understanding of accounting standards and principles.

  Carrying value of the bond

A $750,000 bond was retired at 103 when the carrying value of the bond was $777,500. The entry to record the retirement would include a

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd