Final answer:
A student placed a market buy order for 230 shares of Coldwater Creek, Inc. (CWTR) at the ask price of $20.30 per share. To calculate the total cost, you multiply the number of shares by the ask price, resulting in a total cost of $4,669.00, excluding any additional transaction fees.
Step-by-step explanation:
To determine the total cost of purchasing the shares of Coldwater Creek, Inc. (CWTR), we need to consider the market order that was executed. A market order is an instruction to buy or sell a security immediately at the best available current price. In this case, the current ask price is $20.30, which is the price at which sellers are willing to sell their shares. When buying a stock with a market order, the ask price is commonly the price that will be paid per share, assuming there is sufficient volume at that price.
To calculate the total cost, you multiply the number of shares purchased by the ask price:
Total cost = Number of shares × Ask price
For the 230 shares of CWTR at the ask price of $20.30 per share, the calculation would be:
Total cost = 230 shares × $20.30/share
Total cost = $4,669.00
Therefore, the total cost to buy 230 shares of Coldwater Creek, Inc. at the ask price of $20.30 per share is $4,669.00, excluding any transaction fees or commissions that may apply. This amount represents the cost of shares before accounting for any additional costs such as brokerage fees.