Which of the Following Statements Is FALSE

question 26

Multiple Choice

Which of the following statements is FALSE?

• A)On NASDAQ,stocks can and do have multiple market makers who compete with each other.Each market maker must post bid and ask prices in the NASDAQ network where they can be viewed by all participants.
• B)Bid prices exceed ask prices.
• C)Because customers always buy at the ask and sell at the bid,the bid-ask spread is a transaction cost investors have to pay in order to trade.
• D)Prior to 2005,market makers (known on the NYSE as specialists)matched buyers and sellers on the floor of the NYSE.

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Definitions:

Entrepreneurial Start-Up

A newly founded company with innovative business ideas aimed at addressing unmet market needs or offering new solutions.

Equity Financing

The method of raising capital by selling company shares to investors; in return, investors receive ownership interests in the company.

Debt Financing

A method of raising capital through borrowing money that must be repaid, typically with interest.

Going into Debt

The state of owing money to another person or entity as a result of borrowing.