The Bid-Ask Spread Is Computed Using the Following Formula

question 31

Multiple Choice

The bid-ask spread is computed using the following formula:

• A)(Ask price - Bid price)/Bid price.
• B)(Bid price - Ask price)/Bid price.
• C)(Bid price - Ask price)/Ask price.
• D)(Ask price - Bid price)/Ask price.

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Definitions:

FOB Shipping Point

A term used in shipping indicating that the buyer assumes responsibility for the goods and shipping costs the moment the goods leave the seller's premises.

Merchandise Inventory

Goods and products that a firm holds with the intent to sell them as part of its business operations; considered a current asset on the balance sheet.

Perpetual Inventory System

A method for accounting inventory that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

MasterCard

A multinational financial services corporation that facilitates electronic funds transfers globally, primarily through its branded credit and debit cards.