The Spread Between the Bid and Ask Prices May Be

question 2

True/False

The spread between the bid and ask prices may be viewed as one of the costs of investing.

---

Definitions:

Product Price

The cost at which a particular good or service is sold to customers.

Warranty Purchasers

Individuals or entities who buy a warranty, typically an agreement for repair or replacement of a product, should it fail within a specified period.

Adverse Selection

A situation in which asymmetric information leads to the selection of undesirable alternatives in transactions.

Pre-Contractually

Refers to activities, negotiations, or conditions that occur before the formal agreement or contract is signed.