Which of the Following Statements Is FALSE

question 31

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, market makers (known on the NYSE as specialists) match buyers and sellers.

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Definitions:

Progressive Income Tax

A tax system where the tax rate increases as the taxable amount of an individual's or entity's income increases, aiming to redistribute income more equally.

Efficiency

The degree to which an entity optimizes the use of its resources to achieve its objectives, minimizing waste and maximizing output.

Equality

Refers to the state or quality of being equal, especially in status, rights, or opportunities.

Redistributes Income

The process by which government policies, taxation, and public spending aim to adjust the allocation of income across a society.