Part I

Here is some price information on university stock. Suppose that the university trades in a dealer market.

Bid Ask

55.25 55.50

Suppose you have submitted an order to your broker to buy at market. At what price will your trade be executed?

Suppose you have submitted an order to sell at market. At what price will your trade be executed?

Suppose you have submitted a limit order to sell at $55.62. What will happen?

Suppose you have submitted a limit order to buy at $55.37. What will happen?

Please submit your analysis in a Word document.

Part II

In an essay address the following:

You have $5,000 to invest for the next year and are considering three alternatives:

A money market fund with an average maturity of 30 days offering a current yield of 6% per year.

A 1-year savings deposit at a bank offering an interest rate of 7.5%.

A 20-year U.S. Treasury bond offering a yield to maturity of 9% per year.

What role does your forecast of future interest rates play in your decisions?

Your paper must be in a Word document of 2-4 pages, not counting the title page. Include your calculations in a table within your paper and be sure to submit only one document to be graded in response to this assignment. Your paper must be formatted in accordance with APA.