Question 2 a. Briefly explain the why limit buy and sell order are better than...
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Question 2 a. Briefly explain the why limit buy and sell order are better than market order to preserve stock market liquidity? b. An investor is bullish on ACMELAB stock. The current market price is Tk. 108.40 per share, and investor has Tk. 61320 of own to invest. Investor can borrow an additional amount of Tk. 47080 from broker at an interest rate of 12.50% per year. A total of 1000 shares can be invested in this process. i. What will be investor rate of return if the price of ACMELAB stock goes up by 18.5% during the next year? Assume the stock currently pays no dividend. ii. If maintenance margin is 45.5%, how far does the price of ACMELAB stock have to fall to get a margin call? iii. If current market price plunge by 32% is there any margin call will be warranted
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