Why Is the Ask Price Higher Than the Bid Price

question 36

Multiple Choice

Why is the ask price higher than the bid price?

• A) It represents the gain a market maker achieves.
• B) It represents the gain the stock seller achieves.
• C) It represents the gain the stock buyer achieves.
• D) It represents the gain all participants will achieve.

---

Definitions:

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation.

Speculation

The act of forming theories or conjectures without firm evidence, often about financial markets or future events.

Cause

A factor or event that brings about an effect or a change in a situation.

Logical Arguments

Reasoning presented in a structured and coherent manner to persuade or explain, based on principles of logic.