Answer: $20.35.

## Explanation An immediate-or-cancel (IOC) limit buy order executes immediately at or below the limit price and cancels any unfilled portion. The trader wants to buy 700 shares at a maximum price of $20.50. ### Step 1: Analyze the order book From the provided table: **Sell Orders (Ask side):** | Order | Quantity (shares) | Limit Price ($) | |-------|-------------------|-----------------| | 1 | 200 | 20.20 | | 2 | 300 | 20.35 | | 3 | 400 | 20.50 | | 4 | 100 | 20.65 | | 5 | 200 | 20.70 | ### Step 2: Determine which orders can be executed Since this is a limit buy order at $20.50, the trader can only buy shares at prices ≤ $20.50. Looking at the sell orders: - Order 1: 200 shares at $20.20 ✓ (≤ $20.50) - Order 2: 300 shares at $20.35 ✓ (≤ $20.50) - Order 3: 400 shares at $20.50 ✓ (≤ $20.50) - Order 4: 100 shares at $20.65 ✗ (> $20.50) - Order 5: 200 shares at $20.70 ✗ (> $20.50) ### Step 3: Calculate execution Total shares available at or below $20.50: - 200 shares @ $20.20 = $4,040 - 300 shares @ $20.35 = $6,105 - 400 shares @ $20.50 = $8,200 **Total available:** 900 shares Since the trader wants 700 shares, they can fill the entire order from the first three sell orders. ### Step 4: Calculate average price Total cost for 700 shares: - Buy all 200 shares from Order 1 @ $20.20 = $4,040 - Buy all 300 shares from Order 2 @ $20.35 = $6,105 - Buy 200 of the 400 shares from Order 3 @ $20.50 = $4,100 Total cost = $4,040 + $6,105 + $4,100 = $14,245 Total shares = 700 Average price = $14,245 ÷ 700 = $20.35 ### Step 5: Verify - The average price of $20.35 matches option A. - The trader pays less than the limit price of $20.50 because some shares are bought at lower prices ($20.20 and $20.35). - The IOC order executes immediately and cancels any unfilled portion (in this case, the remaining 200 shares from Order 3 at $20.50 are not needed). **Therefore, the correct answer is A. $20.35.**

Author: LeetQuiz .