Orders for Vivendi Universal Have Been Entered on a Crossing

question 7

Essay

Orders for Vivendi Universal have been entered on a crossing network for European shares. There is one order from Participant A to buy 100,000 shares, one order from Participant B to buy 200,000 shares, and one order from Participant C to sell 80,000 shares. Assume that the orders were entered in that chronological order and that the network gives priority to the oldest orders. At the time specified for the crossing session, Vivendi Universal is transacted at 17.40 euros on Euronext in Paris, its primary market.
a. What trades would take place on the crossing network?
b. Assume now that all the orders are AON (all or nothing), meaning that the whole block has to be traded at the same price. What trades would take place?

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Definitions:

Real Defenses

Legitimate legal defenses that can be used to nullify a contract or claim, regardless of its apparent validity.

Lack of Consideration

A situation in contract law where there is an absence of a promise, act, or value exchange, rendering the contract unenforceable.

Fraud in the Inducement

A type of fraud involving false representations that lead another to enter into an agreement or transaction.

Breach of Contract

The violation of any agreed-upon terms and conditions in a binding contract.