Specialists Try to Maintain a Narrow Bid-Ask Spread Because

question 69

Multiple Choice

Specialists try to maintain a narrow bid-ask spread because:
I. If the spread is too large, they will not participate in as many trades, losing commission income.
II. The exchange requires specialists to maintain price continuity.
III. Specialists are nonprofit entities designed to facilitate market transactions rather than make a profit.

• A) I only
• B) I and II only
• C) II and III only
• D) I, II, and III

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Definitions:

Insurance Contract

An agreement between an insurance company and an individual or entity, where the insurer agrees to compensate for specified losses in exchange for a premium.

Insurer

is an entity or company that provides insurance policies to individuals or organizations, offering financial protection or reimbursement against losses under the terms of an insurance contract.

Legal Representation

The act of having a lawyer or attorney conduct legal affairs and defend or advise in legal matters on one's behalf.

Insurance Coverage

Refers to the amount of risk or liability that is covered for an individual or entity by way of insurance services.