
Explanation:
The correct answer is B because a fill or kill order (also known as an immediate or cancel order) requires the trade to be executed immediately at the best available prices up to the limit price, or else canceled. In this case, the order would be partially filled as follows: 5 shares at $75.90 and 10 shares at $76.00. The average price per share is calculated as ((5 * $75.90) + (10 * $76.00)) / 15 ≈ $75.97. Option A is incorrect as it misinterprets the bid and offer prices, while Option C incorrectly assumes the entire order is filled at the limit price of $76.00.
A trader submits a fill or kill buy order for 20 shares of a stock at a limit price of $76.00. Given the following limit order book, the trader's average price per share for this trade will be closest to:
A
$75.80.
B
$75.97.
C
$76.00.