To earn profits, the market maker must a. bid high, ask low b. equalize...
To earn profits, the market maker must
a. bid high, ask low
b. equalize the bid and ask price
c. not create the market
d. bid low, ask high
Homework Answers
Answer: a. bid high, ask low
Market maker is a participant or member firm in an exchange that buys and sells securities from their own account for their customers. They are called Brokerage Company who does agency trade.
Example: The market maker purchase shares of XYZ for $80 each (the ask price) and then offer to sell them to a buyer at $80.05 (the bid price). The difference between the ask and bid price is only $.05, but by trading millions of shares in a day, he will be able to make profit.
Add Answer to:
To earn profits, the market maker must
a. bid high, ask low
b. equalize...
The market bid/ask quote for $/£ is $1.4397 - 1.4402. A market maker has a strong...
The market bid/ask quote for $/£ is $1.4397 - 1.4402. A market maker has a strong opinion about the future direction of the pound and places his quote as "98-03". Which currency does the market maker expect to appreciate?
Republic Services (RS) Submit high bid Submit low bid A. Both firms will submit a low...
Republic Services (RS) Submit high bid Submit low bid A. Both firms will submit a low bid in the Nash equilibrium outcome. The firms' managers will be unhappy with this outcome, as they could increase their profits by simultaneously choosing another outcome. O B. Both firms will submit a high bid in the Nash equilibrium outcome. The firms' managers will be happy with this outcome, as they cannot increase their profits by choosing other outcomes. O C. Both firms will...
Which market structure can earn long-run economic profits? a. Perfect competition b. Monopolistic competition c. Oligopoly...
Which market structure can earn long-run economic profits? a. Perfect competition b. Monopolistic competition c. Oligopoly d. Monopoly e. c and d only All firms produce where a. marginal benefits are greater than marginal profits b. short-run profits are less than long-run profits c. marginal revenues are greater than or equal to marginal costs d. average total costs are greater than marginal costs A perfect competitor is a __________ and can earn economic profits ____________. a. price maker, in both...
For Stock A, which is traded in a dealer market, the bid-ask spread is 1 dollar....
For Stock A, which is traded in a dealer market, the bid-ask spread is 1 dollar. A buy-market order is executed at 60 dollars. A. Will a limit-sell order of 60.5 be executed? If so, in what price? B. Will a limit-buy order of 59.5 be execeuted? If so, in what price? C. Will a market-sell order be executed? If so, in what price?
On November 1, 20-n, you notice the following bid-ask quotes in the option market (supposedly perfect...
On November 1, 20-n, you notice the following bid-ask quotes in the option market (supposedly perfect otherwise!), the underlying asset being stock ABC: Call 130 January: 11-12 Call 145 January: 7-8 Put 130 January: 8.5-9.5 Put 145 January: 16-17 ABC quotes 133 and the 3-month interest rate is 4% (proportional, annualized rate). a) What arbitrage should you undertake (transaction costs are negligible, but you are not market-maker, so that you are subject to the bid-ask spread)? b) Is it really...
Foreign exchange earn a profit by a bid-ask spread on currencies they purchase and sell. Foreign...
Foreign exchange earn a profit by a bid-ask spread on currencies they purchase and sell. Foreign exchange on the other hand, carn a profit by bringing together buyers and sellers of foreign currencies and earning a commission on each sale and purchase brokers; dealers B) speculators; arbitrageurs C) central banks; treasures D) dealers; brokers A) Which of the following led to the eventual demise of the fixed currency exchange rate regime worked out at Bretton Woods? A) widely divergent national...
Under all the various types of market structures, firms must eventually earn some economic profits for...
Under all the various types of market structures, firms must eventually earn some economic profits for sustainable operations. This statement is Group of answer choices true false
14. Which statement is true about bond dealers? (May be more than one) a. Bond dealers...
14. Which statement is true about bond dealers? (May be more than one) a. Bond dealers buy bonds at the ask price and sell them at the bid price b. Bond dealers buy bonds at the bid price and sell them at the ask price c. Bond dealers don't keep an inventory of bonds in their portfolio d. Bond dealers earn profits from the bid-ask spread e. Bond brokers who are not dealers earn profits earn profits from bid-ask spread...
Firm B High Price Low Price High Price A:8 B:8 A;3 B:20 Low Price A:20 B:3...
Firm B High Price Low Price High Price A:8 B:8 A;3 B:20 Low Price A:20 B:3 A:6 B:6 *Firm A on Left, Firm B on top - What is the PV of profits if the firms collude successfully assuming an interest rate of 15%? - What is PV of profits for Firm A if it defects from the collusive behavior assuming an interest rate of 15%?
4. Suppose Hewlett-Packard (HPQ) stock is currently trading on the NYSE with a bid price of $28.00 and an ask price of...
4. Suppose Hewlett-Packard (HPQ) stock is currently trading on the NYSE with a bid price of $28.00 and an ask price of $28.10. At the same time, a NASDAQ dealer posts a bid price for HPQ of $27.85 and an ask price of $27.95 (a) Is there an arbitrage opportunity in this case? If so, how would you cxploit it? (b) Suppose the NASDAQ dealer revises his quotes to a bid price of $27.95 and an ask price of $28.05....
Republic Services (RS) Submit high bid Submit low bid A. Both firms will submit a low bid in the Nash equilibrium outcome. The firms' managers will be unhappy with this outcome, as they could increase their profits by simultaneously choosing another outcome. O B. Both firms will submit a high bid in the Nash equilibrium outcome. The firms' managers will be happy with this outcome, as they cannot increase their profits by choosing other outcomes. O C. Both firms will...
For Stock A, which is traded in a dealer market, the bid-ask spread is 1 dollar. A buy-market order is executed at 60 dollars. A. Will a limit-sell order of 60.5 be executed? If so, in what price? B. Will a limit-buy order of 59.5 be execeuted? If so, in what price? C. Will a market-sell order be executed? If so, in what price?
Foreign exchange earn a profit by a bid-ask spread on currencies they purchase and sell. Foreign exchange on the other hand, carn a profit by bringing together buyers and sellers of foreign currencies and earning a commission on each sale and purchase brokers; dealers B) speculators; arbitrageurs C) central banks; treasures D) dealers; brokers A) Which of the following led to the eventual demise of the fixed currency exchange rate regime worked out at Bretton Woods? A) widely divergent national...
14. Which statement is true about bond dealers? (May be more than one) a. Bond dealers buy bonds at the ask price and sell them at the bid price b. Bond dealers buy bonds at the bid price and sell them at the ask price c. Bond dealers don't keep an inventory of bonds in their portfolio d. Bond dealers earn profits from the bid-ask spread e. Bond brokers who are not dealers earn profits earn profits from bid-ask spread...
4. Suppose Hewlett-Packard (HPQ) stock is currently trading on the NYSE with a bid price of $28.00 and an ask price of $28.10. At the same time, a NASDAQ dealer posts a bid price for HPQ of $27.85 and an ask price of $27.95 (a) Is there an arbitrage opportunity in this case? If so, how would you cxploit it? (b) Suppose the NASDAQ dealer revises his quotes to a bid price of $27.95 and an ask price of $28.05....
Most questions answered within 3 hours.
-
NEED THIS URGENTLY PLEASEEE
Suppose a fair coin is tossed 5 times and the result are...
asked 6 minutes ago -
Find the magnetic field B produced by several circular loops of
which has a radius given...
asked 14 minutes ago -
A mole of monatomic ideal gas is expanded from 0.45 L to 0.75L
at an external...
asked 13 minutes ago -
Carbon dioxide (CO2) gas is steadily pressurized and cooled by
sending it sequentially through a compressor...
asked 17 minutes ago -
calculare the standard deviation of a portfolio that contains 40%
of one stock with a standard...
asked 14 minutes ago -
When exposed to sunlight, a hole in a sheet of copper expands in
diameter by 0.160...
asked 32 minutes ago -
Economists believe that there are many nonmonetary gains from
further trade opening. Which of the following...
asked 34 minutes ago -
For message exchange over the Internet, the specific processes
that send and receive packets are identified...
asked 27 minutes ago -
How would
you create a group that promotes multicultural
understanding?
Should a
session conducted with youth...
asked 33 minutes ago -
A 2-kg block sits on a horizontal table. There is a hole in the
table directly...
asked 47 minutes ago -
If the rate law for the reaction A ⟶ Products is rate = k[A]2 ,
calculate...
asked 51 minutes ago -
A
projectile is shot horizontally at 23.4 m/s from the roof of a
building 55 m...
asked 1 hour ago