Question

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 Shares Price 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 100 shares comes in, at what price will it be filled?

Answer 1

$50.25

Step-by-step explanation:

The below data given in the question will help to determine the price will it be filled, if the market buy order for 100 shares comes in

Limit Buy Orders Limit Sell Orders

Price Shares Price 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

Therefore in a situation where a market buy order for 100 shares comes in, it will be filled at the amount of $50.25 which will be the best price reason been that the amount of $50.25 is the lowest amount for the limit sell order when compared with other price listed under the limits sell order.