The Bid-Ask Spread Exists Because of ________

question 7

Multiple Choice

The bid-ask spread exists because of ________.

• A) market inefficiencies
• B) discontinuities in the markets
• C) the need for dealers to cover expenses and make a profit
• D) lack of trading in thin markets

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Definitions:

Degrees of Freedom

The number of independent values or quantities that can be assigned to a statistical distribution.

T Procedure

A statistical method used for hypothesis testing and constructing confidence intervals, especially useful when the sample size is small.

Equal Variances

A condition in which two or more groups have the same variance, often assumed in parametric tests comparing groups.

Pooled Two-sample T Procedure

A statistical method used to test if there is a difference between the means of two populations, assuming equal variances.