The bid price is the price at which a dealer (or market maker) is willing to buy a security. It represents the highest price that a buyer is willing to pay for a security. This is different from the asking price, which is the price at which a dealer is willing to sell a security.

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The Bid Price

Question 28

Multiple Choice

The bid price

A) is the price that the dealer has just paid for something,his historical cost of the most recent trade.
B) is the price that a dealer stands ready to pay.
C) refers only to auctions like eBay,not over-the-counter transactions with dealers.
D) is the price that a dealer stands ready to sell at.

Correct Answer: