Answer: $20.35.

## Explanation For an immediate-or-cancel (IOC) limit buy order at $20.50 for 700 shares: **Order Book Data:** **Bid Side (Buy Orders):** | Order | Quantity | Price | |-------|----------|-------| | 1 | 500 | 18.50 | | 2 | 300 | 18.90 | | 3 | 400 | 19.20 | | 4 | 200 | 20.10 | | 5 | 100 | 20.15 | **Ask Side (Sell Orders):** | Order | Quantity | Price | |-------|----------|-------| | 1 | 200 | 20.20 | | 2 | 300 | 20.35 | | 3 | 400 | 20.50 | | 4 | 100 | 20.65 | | 5 | 200 | 20.70 | **Execution Process:** 1. The trader wants to buy 700 shares at a maximum price of $20.50 2. IOC order means: execute immediately at or below the limit price, cancel any unfilled portion 3. The order will match with sell orders at or below $20.50 **Available sell orders at or below $20.50:** - Order 1: 200 shares at $20.20 - Order 2: 300 shares at $20.35 - Order 3: 400 shares at $20.50 **Total available:** 200 + 300 + 400 = 900 shares at or below $20.50 **Execution for 700 shares:** - First 200 shares at $20.20 - Next 300 shares at $20.35 - Next 200 shares at $20.50 (from Order 3's 400 shares) **Average price calculation:** \[\text{Total cost} = (200 \times 20.20) + (300 \times 20.35) + (200 \times 20.50)\] \[\text{Total cost} = 4,040 + 6,105 + 4,100 = 14,245\] \[\text{Average price} = \frac{14,245}{700} = 20.35\] **Answer:** $20.35 (Option A) **Key Points:** - IOC orders execute immediately at best available prices up to the limit price - The order fills at the best available prices first (lowest ask prices) - The average price is weighted by the quantities filled at each price level

Author: LeetQuiz .