Where a market has both a bid and an ask process, the price used in measuring fair value is:
A) the average of the bid-ask prices over a 3 month period.
B) the most representative price for the transaction.
C) the ask price.
D) the bid price.

Question

Quizplus · Accepted Answer

The most representative price for the transaction is used in measuring fair value, as it best reflects what the market participants would use in a current transaction.

Where a Market Has Both a Bid and an Ask