Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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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.)
(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.)
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