What price represents what a customer must pay when buying from a dealer?

What price represents what a customer must pay when buying from a dealer?

• A. Bid
• B. Ask
• C. Offer
• D. Spread

Answer: (B)

The price that a customer must pay when buying from a dealer is referred to as the "ask" price. This is the lowest price at which a seller is willing to sell an asset, such as stocks or bonds. In trading, it is important for buyers to recognize that the ask price typically represents the price they will pay when executing a buy order. Understanding this concept is crucial for investors when analyzing market behavior and making informed buying decisions. In trading terminology, the "bid" is the price at which buyers are willing to purchase an asset, which is distinct from the ask price. The "offer" is often used interchangeably with the ask price, although it can sometimes imply a wider range of prices that a seller is willing to accept. The "spread" refers to the difference between the bid and ask prices and is an important indicator of market liquidity and transaction costs. Knowing the definitions and context of these terms will help clarify the mechanics of how buying and selling occurs in financial markets.

The price that a customer must pay when buying from a dealer is referred to as the "ask" price. This is the lowest price at which a seller is willing to sell an asset, such as stocks or bonds. In trading, it is important for buyers to recognize that the ask price typically represents the price they will pay when executing a buy order. Understanding this concept is crucial for investors when analyzing market behavior and making informed buying decisions.

In trading terminology, the "bid" is the price at which buyers are willing to purchase an asset, which is distinct from the ask price. The "offer" is often used interchangeably with the ask price, although it can sometimes imply a wider range of prices that a seller is willing to accept. The "spread" refers to the difference between the bid and ask prices and is an important indicator of market liquidity and transaction costs. Knowing the definitions and context of these terms will help clarify the mechanics of how buying and selling occurs in financial markets.