A client offers a block-trade to sell 10,000 shares to you at $1.56. Based on the market depth table below, should you accept the offer? 2 Buyers Qty 2.405 10.000 5.000 5,705 5.000 14.700 Price 1.455 11.45 1.42 1.415 1.41 1.40 Price 1.54 1.55 1.59 1.595 1.60 1.63 1,65 1.67 1.68 1.72 Sellers @ty 12,699 15.000 15.000 5,000 1.000 20.000 1.560 5.000 2.500 12.240 Num Select one: O a. No, there is insufficient liquidity on the bid to close the deal at a profit • b. Yes, there is sufficient liquidity on the bid to close the deal at a profit O c. Yes, there is sufficient liquidity on the offer to close the deal at a profit O d. There is insufficient information to make a suitable decision • e. No, there is insufficient liquidity on the offer to close the deal at a profit
Question
A client offers a block-trade to sell 10,000 shares to you at $1.56. Based on the market depth table below, should you accept the offer? 2 Buyers Qty 2.405 10.000 5.000 5,705 5.000 14.700 Price 1.455 11.45 1.42 1.415 1.41 1.40 Price 1.54 1.55 1.59 1.595 1.60 1.63 1,65 1.67 1.68 1.72 Sellers @ty 12,699 15.000 15.000 5,000 1.000 20.000 1.560 5.000 2.500 12.240 Num Select one: O a. No, there is insufficient liquidity on the bid to close the deal at a profit • b. Yes, there is sufficient liquidity on the bid to close the deal at a profit O c. Yes, there is sufficient liquidity on the offer to close the deal at a profit O d. There is insufficient information to make a suitable decision • e. No, there is insufficient liquidity on the offer to close the deal at a profit
Solution
The answer is a. No, there is insufficient liquidity on the bid to close the deal at a profit.
Here's why:
The client is offering to sell 10,000 shares at 1.455, which is lower than the price the client is offering.
Therefore, if you were to accept the client's offer, you would not be able to sell the shares at a profit based on the current market conditions.
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