Trading & MarketsQuestion 85 of 125
In a securities quote, the bid and ask represent:
a.The highest price a buyer will pay (bid) and the lowest price a seller will accept (ask)
b.The opening and closing prices
c.Two different settlement dates
d.The dividend and the coupon
Explanation
The bid is the highest price buyers are currently willing to pay, and the ask (offer) is the lowest price sellers will accept. The difference between them is the spread, which reflects liquidity and is a cost of trading; investors generally buy at the ask and sell at the bid.
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