Hammond Securities holds an inventory of ABC Corp. stock, buying at $65.00 and selling at $67.50. The bid is _____; the bid-ask spread is _____.
A) $65.00; $2.50
B) $67.50; $2.50
C) lower than the ask price; higher than the bid price
D) higher than the ask price; $2.50

Question

Quizplus · Accepted Answer

The bid is the price at which the dealer buys, which is $65.00. The bid-ask spread is the difference between the ask price ($67.50) and the bid price ($65.00), which is $2.50.

Hammond Securities Holds an Inventory of ABC Corp