If the Market Maker Will Buy at 4 and Sell

question 2

Multiple Choice

If the market maker will buy at 4 and sell at 4.50,the bid-ask spread is

• A)8.50
• B)4.25
• C)0.50
• D)4.00
• E)none of the above

---

Definitions:

Time-Series Model

Statistical models used to analyze or forecast data points collected or indexed in time order.

Past Data Points

Historical values or observations that have been recorded and can be analyzed to understand trends or patterns.

Linear-Regression Analysis

A straight-line mathematical model to describe the functional relationships between independent and dependent variables.

Independent Variables

Variables in statistical or mathematical modeling that are manipulated or changed to assess their effect on dependent variables.