The Difference Between the Ask Rate and the Bid Rate

question 16

Multiple Choice

The difference between the ask rate and the bid rate is known as the

• A) arbitrage profit.
• B) dealer's profit.
• C) spread.
• D) bid-ask spread.

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Definitions:

Subprime Loan

A type of loan offered to individuals with poor credit scores or limited credit history, typically at higher interest rates due to perceived increased risk.

Conventional Mortgage

A mortgage that involves no government backing by either insurance or guarantee.

Mortgagor

The party who borrows money and gives a mortgage to the lender or mortgagee as security for the loan.

Collateral

The property that is subject to a security interest.