The cost of buying and selling a stock consists of
A) broker's commissions.
B) dealer's bid-asked spread.
C) a price concession an investor may be forced to make.
D) broker's commissions and dealer's bid-asked spread.
E) broker's commissions, dealer's bid-asked spread, and a price concession an investor may be forced to make.

Question

Quizplus · Accepted Answer

The cost of buying and selling a stock includes broker's commissions (the fee charged by a broker for executing the transaction), dealer's bid-asked spread (the difference between the highest price that a buyer is willing to pay and the lowest price that a seller is willing to accept), and a price concession an investor may be forced to make (which can occur in situations where an investor needs to adjust their price to make a trade happen). These elements together constitute the total cost associated with trading a stock.

The Cost of Buying and Selling a Stock Consists of