Asked by Piper Chatman on May 26, 2024
Verified
The cost of buying and selling a stock includes:
I. Broker's commissions
II. Dealer's bid-asked spread
III. Price concessions that investors may be forced to make
A) I and II only
B) II and III only
C) I and III only
D) I, II, and III
Bid-Asked Spread
The difference between the highest price a buyer is willing to pay for an asset and the lowest price a seller is willing to accept.
Broker's Commissions
Fees charged by a broker for executing transactions or providing specialized services.
Price Concessions
Discounts or adjustments in the price of a good, service, or security, often granted to finalize a deal.
- Familiarize yourself with the bid-ask spread and the components that comprise it, including the aspects that determine its scale.
Verified Answer
DM
Dillon MeierJun 01, 2024
Final Answer :
D
Explanation :
The cost of buying and selling a stock includes all of the listed factors, which are broker's commissions, dealer's bid-asked spread, and the price concessions that investors may be forced to make. Therefore, option D, which includes all three factors, is the correct answer.
Learning Objectives
- Familiarize yourself with the bid-ask spread and the components that comprise it, including the aspects that determine its scale.