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Question 3 (total of 15 marks): Consider the below screenshot detailing market depth in theAustralian mining services company Intega's stock on 28 October 2019. Question 3a (1 mark): What is

the bid-ask spread on the stock? Question 3b (1 mark): What is your best estimate of the 'true price' of this stock? Question 3c (1 mark): What is the best price that you could sell one stock for when placinga market order? Question 3d (2 mark): How much money could you buy 10,000 stock for using a marketorder? (Note that in this question you are buying, while in the previous question you wereselling). Question 3e (2 mark): What would be the implicit cost of buying these 10,000 shares usinga market order, given your 'true price' answered above? Question 3f (2 mark): Intega is a mining services company. If you thought there was goingto be a mining boom in the future, you might wish to buy some stock in the company beforeit rises. If you did this, what sort of trader would you be? Circle one option from thefollowing four in bold: Hedger,speculator, arbitrageuror market maker? Question 3g (2 mark): What sort of trader makes large profits from a wide bid-ask spread?Circle one option from the following four in bold: Hedger,speculator,arbitrageuror market maker? Question 3h (2 mark): If you bought one (1) of these stocks using a market order and thenimmediately sold it using a market order, what proportion of your money would bedestroyed by the implicit bid-ask spread transaction cost? Question 3i (2 mark): If you bought 10,000 of these stocks using a market order and thenimmediately sold them all using a market order, would a higher, lower or equal proportionbe destroyed by the implicit bid-ask spread transaction cost compared to the previousquestion where you were buying and selling just one stock? Just circle one option from thefollowing three in bold: Higher proportion,lower proportionor the same proportion.

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