Use the Information for the Question(s) Below -What Will the Offer Price of These Shares Be If

question 63

Multiple Choice

Use the information for the question(s) below.
Luther Industries is in the process of selling shares in an auction IPO. At the end of the bidding period, Luther's investment
bank has received the following bids:
$\begin{array} { l r } \hline \text { Price (\$) } & \begin{array} { c } \text { Number of } \\\text { Shares Bid }\end{array} \\\hline \$ 19.50 & 50,000 \\\hline \$ 19.25 & 25,000 \\\hline \$ 19.10 & 25,000 \\\hline \$ 19.00 & 100,000 \\\hline \$ 18.75 & 125,000 \\\hline \$ 18.50 & 75,000 \\\hline \$ 18.25 & 150,000 \\\hline \$ 18.00 & 240,000 \\\hline \$ 17.75 & 80,000 \\\hline \$ 17.50 & 125,000 \\\hline \$ 17.25 & 150,000 \\\hline \$ 17.00 & 100,000 \\\hline \$ 16.90 & 60,000 \\\hline \$ 16.75 & 80,000 \\\hline \$ 16.50 & 75,000 \\\hline \$ 16.25 & 200,000 \\\hline\end{array}$
-What will the offer price of these shares be if Luther is selling 1 million shares?

• A) $17.50
• B) $16.75
• C) $17.25
• D) $17.00

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Definitions:

National Debt

The total amount of money that a country's government has borrowed and not yet repaid, often through the issuance of securities.

Inflationary Gap

The difference between the actual output of an economy and the output it could achieve with full employment, leading to inflation when demand outstrips supply.

GDP

The total economic value of all end goods and services made within a nation's borders during a specific period is known as Gross Domestic Product.

Inflationary Gap

A situation where the demand for goods and services exceeds the supply, leading to inflation and an overheating economy.