Stella places a market order with her broker to buy 1000 shares of OneWorld Corp.The broker buys 1000 shares at $15.40 each,and sells them to Stella at $15.55 each.He also charges a commission of $12.00.What is bid-ask spread in this case?

Question

Quizplus · Accepted Answer

The bid-ask spread is the difference between the price the broker buys the shares ($15.40) and the price he sells them to Stella ($15.55). The spread per share is $0.15, so for 1000 shares, it is $150.

Stella Places a Market Order with Her Broker to Buy