Why Is the Ask Price Higher Than the Bid Price

question 59

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 buy achieves.
• D)It represents the gain all participants will achieve.

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Definitions:

Profit Maximization

The process or strategy of adjusting the operation and production of a business to generate the highest possible profit.

Ethical Conduct

Behavior that aligns with accepted principles of right and wrong governing the professional practice or conduct of an individual or organization.

Fundamental Rights

The basic human rights and freedoms that are guaranteed to all individuals, often protected by law or constitution, such as the right to free speech, equality, and liberty.

Wealth Redistribution

The transfer of income, wealth, or property from some individuals to others by means of a social mechanism such as taxation, charity, welfare, land reform, monetary policies, confiscation, divorce or tort law.