Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you are a market maker in the stock of pfizer (pfe

You are a market maker in the stock of Pfizer (PFE) and quote a bid...

70.2K

Verified Solution

Question

Finance

You are a market maker in the stock of Pfizer (PFE) and quote a bid of $102.25 and an ask of $102.50. Suppose that you have zero inventory.

(a) On Day 1, you receive market buy orders for 10,000 shares and market sell orders for 4,000 shares. How much do you earn on the 4,000 shares that you bought and sold? What is the value of your inventory at the end of the day?

(Hints: It is possible to have negative inventory. Further, there is more than one correct way to value your inventory, but please state what assumption your valuation is based on.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Advance Math
1.2K views

Using the techniques described in this chapter carefully read through the case study and determine the...

Medical Sciences
1.2K views

Discuss the physiology of balance

Mechanical Engineering
1.2K views

A steady two-dimensional laminar fully-developed flow downward between two fixed parallel plates inclined at 50\" with horizontal...

Biology
1.2K views

The system of people agencies and departments that help the President carry out his duties...

Physics
1.2K views

30 Choose the correct graph of the variation of specific heat capacity of water with...

Geometry
1.2K views

When the measure of the sector is found by multiplying these two factors The ratio...

Accounting
1.2K views

Swannee Company manufactures two products, Product A and Product B. The company estimated...

Accounting
1.2K views

Chapter 8, Problem 13QE 0 (4 Bookmarks) Show all steps: OFF Problenm The fund-basis financial...

Accounting
1.2K views

The following data relate to the second quarter operations of Leisure Sports, a wholesale distributor...

Accounting
1.2K views

ArapCo Inc has been holding itself out as corporation for the last 2 years. However,...

Accounting
1.2K views

Why does the current outstanding debt value have to be subtracted from the enterprise value...

Accounting
1.2K views

Help Save & Exi A company pays each of its two office employees each Friday...