《《Investment 8th Chap003》.docVIP

CHAPTER 3: HOW SECURITIES ARE TRADED PROBLEM SETS Answers to this problem will vary. 2. The SuperDot system expedites the flow of orders from exchange members to the specialists. It allows members to send computerized orders directly to the floor of the exchange, which allows the nearly simultaneous sale of each stock in a large portfolio. This capability is necessary for program trading. 3. The dealer sets the bid and asked price. Spreads should be higher on inactively traded stocks and lower on actively traded stocks. 4. a. In principle, potential losses are unbounded, growing directly with