Zebra Stripes Would Like to Sell 400 Shares of Stock

question 27

Multiple Choice

Zebra Stripes would like to sell 400 shares of stock using the Dutch auction method.The bids received were Bidder A,200 shares at $28; Bidder B,300 shares at $27; Bidder C,500 shares at $26; and Bidder D,400 shares at $25.How much will Bidder B have to pay to purchase her allocated shares?

• A)$8,100
• B)$7,610
• C)$6,480
• D)$7,240
• E)$6,730

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Definitions:

Discount Rate

In finance, it's the interest rate the Federal Reserve charges banks for borrowing funds, used to control money supply.

Net Present Value

A method used in finance to assess the profitability of an investment by calculating the present value of its expected future cash flows minus the initial investment cost.

Investment

The action of allocating resources, usually money, with the expectation of generating an income or profit.

Interest Rate

The percentage of a sum of money charged for its use, often expressed as an annual percentage on loans or earned on savings.