Which of the Following Statements Is FALSE

question 10

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)On the floor of the NYSE,prior to 2005 market makers (known on the NYSE as specialists)matched buyers and sellers.

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Definitions:

Barriers To Entry

Obstacles that make it difficult for new competitors to enter a market, such as high start-up costs or complex regulations.

Industry Life Cycle

The Industry Life Cycle outlines the stages of growth, saturation, and decline that industries experience over time, affecting business strategies and market dynamics.

Dividend Payout Yields

The ratio of a company's annual dividends per share to its share price, indicating the amount of dividend income generated by each dollar invested.

ROE

Return on Equity, a financial performance metric determined by dividing net income by shareholders' equity.