Question

You would like to sell 400 shares of International Business Machines (IBM). The current bid and ask quotes are $96.24 and $96.17, respectively. You place a limit sell-order at $96.20. If the trade executes, how much money do you receive from the buyer?

A) $38,464.00
B) $38,496.00
C) $38,468.00
D) $38,480.00

Answer 1

The correct option is D

Step-by-step explanation:

Amount which is received from the buyer is computed as below:

Amount = Number of shares × Price

= 400 × $96.20

= $38,480.00

The amount of current bid quotes between $96.24 and $96.17 but it is placed at $96.20. So, it should be computed at this price.

Therefore, the money receive amounts to $38,480.00.