When U.S.stock prices were converted from fractions to decimals in 2001 the minimum bid-ask spread charged by dealers ________.

Question

Quizplus · Accepted Answer

The conversion from fractions to decimals led to much smaller price increments, which made it easier for investors to trade securities in smaller increments, leading to increased competition among dealers and ultimately lower bid-ask spreads, resulting in decreased minimum bid-ask spread charged by dealers.

When USStock Prices Were Converted from Fractions to Decimals in 2001