Asked by M'Kayla McGee on May 09, 2024
Verified
The difference between the price at which a dealer is willing to buy and the price at which a dealer is willing to sell is called the ________.
A) market spread
B) bid-ask spread
C) bid-ask gap
D) market variation
Bid-Ask Spread
The difference between the highest price that a buyer is willing to pay (bid) for an asset and the lowest price that a seller is willing to accept (ask).
Dealer
An individual or firm in the financial services industry who buys and sells securities for their own account, whether through a broker or otherwise.
Buy and Sell
The basic actions in trading and investing where "buy" refers to acquiring an asset, and "sell" indicates disposing of an asset.
- Learn about the bid-ask spread and its components, including the factors that influence its size.
Verified Answer
MM
Michael MartinezMay 10, 2024
Final Answer :
B
Explanation :
The term used to describe the difference between the price at which a dealer is willing to buy and the price at which a dealer is willing to sell is bid-ask spread. The bid price is the highest price a buyer is willing to pay for a security, while the ask price is the lowest price at which a seller is willing to sell the security. The difference between these two prices is the bid-ask spread.
Learning Objectives
- Learn about the bid-ask spread and its components, including the factors that influence its size.