Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
15th Edition
ISBN: 9780134476315
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
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Textbook Question
Chapter 2, Problem 2.1P
Transaction costs You would like to purchase one Class A share of Berkshire Hathaway through your Scottrade brokerage account. Scottrade charges a $7 commission for online trades. You log into your account, check the real-time quotes for Berkshire Hathaway (you see a bid price of $262,850 and an ask price of $263,770) and submit your order.
- a. What is the current bid/ask spread for Berkshire Hathaway Class A shares?
- b. If Scottrade routes your buy order to the NYSE, where Berkshire Hathaway is listed, what’s the potential minimum your total transaction costs will be?
- c. If, instead, Scottrade routes your buy order to the Nasdaq, where Berkshire Hathaway is not listed, what’s the potential maximum your total transaction costs will be?
- d. Regardless of how your trade is executed, based on the bid/ask spread what is the market value of your trade?
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Transaction costs You would like to purchase one Class A share of Berkshire Hathaway through your TD Ameritrade brokerage account. TD Ameritrade advertises a $5 commission for trades using their phone-based interactive voice response system. You call and learn that the bid price is $262,850.00 and the ask price is $263,770.00, and you submit your order for one share.
a. The current bid/ask spread for Berkshire Hathaway Class A shares is $.......?(Round to the nearest cent.)
b. If TD Ameritrade routes your buy order to the NYSE, the potential minimum for your total transaction costs is $........? (Round to the nearest dollar.)
c. If TD Ameritrade routes your buy order to NASDAQ, the potential maximum for your total transaction costs is $..........? (Round to the nearest cent.)
d. Regardless of how your trade is executed, based on the bid/ask spread, the market value of your trade is $..........? (Round to the nearest cent.)
Find the cost, at the day's closing price, for the stock purchase below. Include typical discount broker commissions as described in the table, using Broker B.
Stock Symbol: GFB
Number of Shares: 2300
Transaction Type: Automated (Online)
The cost for the stock purchase is $
(Simplify your answer.)
NEED ALL QUEST....
You would like to purchase one ClassA share of Berkshire Hathaway through your TD Ameritrade brokerage account. TD Ameritrade advertises a $5 commission for trades using their phone-based interactive voice response system. You call and learn that the bid price is $285,705.59 and the asking price is $285,909.62 , and you submit your order for one share.
a. The current bid/ask spread for Berkshire Hathaway Class A shares is $________ (Round to the nearest cent.)
b. If TD Ameritrade routes your buy order to the NYSE, the potential minimum for your total transaction costs is $________ (Round to the nearest dollar.)
c. If TD Ameritradevroutes your buy order to NASDAQ, the potential maximum for your total transaction costs is $________ (Round to the nearest cent.)
d. Regardless of how your trade is executed, based on the bid/ask spread, the market value of your trade is $________ (Round to the nearest cent.)
Chapter 2 Solutions
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Ch. 2.1 - What are financial institutions? Describe the role...Ch. 2.1 - Prob. 2.2RQCh. 2.1 - Describe the role of commercial banks, investment...Ch. 2.2 - What role do financial markets play in our...Ch. 2.2 - Prob. 2.5RQCh. 2.2 - Prob. 2.6RQCh. 2.2 - Prob. 2.7RQCh. 2.2 - Describe the role of capital markets from the...Ch. 2.3 - Prob. 2.9RQCh. 2.3 - Prob. 2.10RQ
Ch. 2.4 - What is the difference between an angel investor...Ch. 2.4 - Prob. 2.12RQCh. 2.4 - Prob. 2.13RQCh. 2.4 - Prob. 2.14RQCh. 2.5 - Prob. 2.15RQCh. 2.5 - What is a mortgage-backed security? What basic...Ch. 2.5 - Prob. 2.17RQCh. 2.5 - Why do falling home prices create an incentive for...Ch. 2.5 - Why does a crisis in the financial sector spill...Ch. 2 - In the chapter opener, you read about the...Ch. 2 - Transaction costs Assume that you use a TD...Ch. 2 - Prob. 2.1WUECh. 2 - Prob. 2.2WUECh. 2 - Prob. 2.3WUECh. 2 - Prob. 2.4WUECh. 2 - Prob. 2.5WUECh. 2 - Your broker calls to offer you the investment...Ch. 2 - Transaction costs You would like to purchase one...Ch. 2 - Transaction costs In late December you decide, for...Ch. 2 - Initial public offering On April 13, 2017, Yext...Ch. 2 - Initial public offering A Brazilian company called...Ch. 2 - Prob. 2.5PCh. 2 - Prob. 1SECh. 2 - Integrative Case 1 Merit Enterprise Corp. Sara...
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