Where a market has both a bid and an ask process,the price used in measuring fair value is:
A)the bid price
B)the ask price
C)the bid-ask spread
D)the most representative price for the transaction.

Question

Quizplus · Accepted Answer

The fair value measurement should reflect the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, which is the most representative price for the transaction.

Where a Market Has Both a Bid and an Ask