When the bid price is below the ask price

Assignment Help Financial Management
Reference no: EM13848986

When the bid price is below the ask price:

A. there is considerable opportunities for arbitrage.

B. considerable losses are made by the seller.

C. a dealer will reduce its sell price.

D. no trade will be made.

Reference no: EM13848986

Questions Cloud

What are the manifest and latent functions of facebook : There are manifest and latent functions of all of societies. What are the manifest and latent functions of Facebook
Calculate cost of each capital component for past three year : Calculate the cost of each capital component for the past three years on Walmart. After-tax cost of debt, cost of preferred, and cost of equity with the DCF method and CAPM method. What do you estimate the company's WAAC?
What rate would you actually being paying here : You are looking at a one-year loan of $13,000. The interest rate is quoted as 9 percent plus three points. A point on a loan is simply 1 percent (one percentage point) of the loan amount. Quotes similar to this one are common with home mortgages. Wha..
The efficient markets hypothesis assumes : The efficient markets hypothesis assumes all of the following except:
When the bid price is below the ask price : When the bid price is below the ask price:
What rate would legally have to be quoted-annual rate : A local finance company quotes an interest rate of 15.6 percent on one-year loans. So, if you borrow $36,000, the interest for the year will be $5,616. Is the interest rate on this loan 15.6 percent? What rate would legally have to be quoted? What is..
Both offering certificates of deposit yielding : You are saving to buy a $191,000 house. There are two competing banks in your area, both offering certificates of deposit yielding 7.6 percent. How long will it take your initial $108,000 investments to reach th edesired level at First Bank, which pa..
Simple interest on its investment accounts : First Simple Bank pays 9.1 percent simple interest on its investment accounts. First Complex Bank pays interest on its accounts compounded annually. What rate should the bank set if it wants to match First Simple Bank over an investment horizon of 11..
What is the bid-ask spread in dollars : A Treasury bond is quoted as 99:18 asked and 99:09 bid. What is the bid-ask spread in dollars on a $5,000 face value bond?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the amount of bid using borrowing and lending

What is the amount of bid using Options contract and how much of the revenue is exposed and what is the amount of bid using Borrowing and Lending

  Dividends are expected to grow at a constant rate

The stock’s current dividend is $1.00, and dividends are expected to grow at a constant rate of 3.5% per year. The intrinsic value of a stock should equal the sum of the present value of all of the dividends that a stock is supposed to pay in the fut..

  Find a costless and riskless trading strategy

Suppose an investor would like to buy 200 Treasury notes. The investor wants notes with an annual coupon rate of 7%, a 3-year maturity, and semi-annual coupon payments. Assume each Treasury note has a par value of $1,000. Find a costless and riskless..

  Consider when evaluating a firm using ratio analysis

All the following are cautions managers and investors should consider when evaluating a firm using ratio analysis EXCEPT:

  Include in taxable income from her operation

Kitty runs a brothel (illegal under state law) and has the following items of income and expense. What is the amount that she must include in taxable income from her operation?

  Develop a cash budget for his latest venture

To avoid any uncertainty regarding his business' financing needs at the time when such needs may arise, Cyrus Brown wants to develop a cash budget for his latest venture: Cyrus Brown Manufacturing (CBM)

  What is the present value of that annuity if discount rate

You are considering preferred stock that pays a quarterly dividend of $1.50. If your desired return is 3% per quarter, how much would you be willing to pay? An investment will provide you with $100 at the end of each year for the next 10 years. What ..

  How about consumer protection legislation

Has there been any new legislation passed to encourage banks to lend? How about consumer protection legislation?

  What is your estimate of stock bs price

The current dividend is $1.50, its current price is $15.90. You are an analyst and believe that the required return on Stock B is the same as that on Stock A. If Stock B pays a constant dividend of $ 2, what is your estimate of Stock B's price?

  Calculate the operating cash flows

(Calculating operating cash flows) assume that a new project will annually generate revenues of $ 2,600,000. Cash expenses including both fixed and variable costs will be $ 500,000, and depreciation will increase by $ 180,000 per year. In addition, l..

  Calculate the company’s weighted average cost of capital

Calculate the Company’s Weighted Average Cost of Capital

  What is the yield to call for these bonds

Atlantis Fisheries issues zero coupon bonds on the market at a price of $514 per bond. Each bond has a face value of $1,000 payable at maturity in 14 years. It is callable in 7 years at a call price of $640. Using semi annual compounding, what is the..

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