Bid and ask prices differ by the degree to which financial intermediaries profit from their role as financial middlemen.

Question

Quizplus · Accepted Answer

Bid and ask prices represent the prices at which buyers and sellers are willing to trade. Financial intermediaries, such as brokers and dealers, act as middlemen in these transactions and profit from the difference between the bid and ask prices, known as the spread. Therefore, bid and ask prices do differ based on the degree of profit that financial intermediaries can make.

Bid and Ask Prices Differ by the Degree to Which