Answer Happy

Transaction costs You would like to purchase one Class A share of Berkshire Hathaway through your TD Ameritrade brokerage account. TD Ameritrade advertises a $5 commission for trades using their phone-based interactive voice response system. You call and learn that the bid price is $285,705.59 and the ask price is $285.909.62, and you submit your order for one share. a. What is the current bid/ask spread for Berkshire Hathaway Class A shares? b. If TD Ameritrade routes your buy order to the NYSE, where Berkshire Hathaway is listed, what's the potential minimum your total transaction costs will be? c. If, instead, TD Ameritrade routes your buy order to NASDAQ, where Berkshire Hathaway is not listed, what's the potential maximum your total transaction costs will be? d. Regardless of how your trade is executed, based on the bid/ask spread, what is the market value of your trade? CITE a. The current bid/ask spread for Berkshire Hathaway Class A shares is $204.03 (Round to the nearest cent.) b. If TD Ameritrade routes your buy order to the NYSE, the potential minimum for your total transaction costs is $5. (Round to the nearest dollar) c. If TD Ameritrade routes your buy order to NASDAQ, the potential maximum for your total transaction costs is $107.02] (Round to the nearest cent.) d. Regardless of how your trade is executed, based on the bid/ask spread, the market value of your trade is $285807.61). (Round to the nearest cent.)