The size of the bond dealer's spread is mainly a function of the:

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The size of the bond dealer's spread is mainly determined by the liquidity of the bond market, which affects the dealer's ability to buy and sell bonds at favorable prices. In a liquid market, spreads tend to be smaller because dealers can easily find buyers and sellers for bonds. In an illiquid market, spreads tend to be larger because dealers face greater uncertainty and risk in buying and selling bonds. The purchase price of the bond, current yield, and face value may all influence the dealer's pricing decisions, but they are not the primary drivers of the spread size.

The Size of the Bond Dealer's Spread Is Mainly a Function