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You find that the bid and ask prices for a stock are $10.45 and $10.80, respectively. If you purchase or sell the stock, you must pay a flat commission of $15. If you buy 100 shares of the stock and immediately sell them, what is your total implied and actual transaction cost in dollars

Respuesta :

Answer:

$65

Explanation:

According to the given situation the calculation of total implied and actual transaction cost is shown below:-

Total cost = Commission + (Ask price - Bid price) × Number of shares

= ($15 × 2) + ($10.80 - $10.45) × 100

= $30 + $0.35 × 100

= $65

So, for computing the total cost we simply applied the above formula so that the total cost could arrive

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