Question

why is the ask price higher than the bid price? multiple choice it represents the gain a market maker achieves. it represents the gain the stock seller achieves. it represents the gain the stock buyer achieves. it represents the gain all participants will achieve

Answer 1

Normally, a security's ask price ought to be more than its bid price. This is due to the investor's customarily expected behavior of never selling a security (at a lower asking price) than they are willing to pay for it (bidding price).

The highest price a buyer will pay to purchase a specific number of shares of stock at any particular time is referred to as the "bid." The lowest price a seller will accept for the stock is referred to as the "ask." Almost invariably, the bid price will be less than the ask, or "offer," price. The bid-ask spread is the distinction between the bid and ask prices. The broker will profit from this discrepancy. or professional managing the transaction. The bid is the price a buyer is prepared to offer for the stock. Almost always, this cost is less than the Ask. The Ask is the price at which the seller is prepared to offer to sell the shares. We would be able to purchase the shares at the bid price in an ideal scenario, but that is rarely feasible. The lowest price at which the dealer is willing to sell the security is the "ask" price. Once more, the dealer's readiness to sell at a premium price is in exchange for making the sale. If the buyer were willing to accept a yield that was equal to or less than the ask yield, the bid yield would be higher than the ask yield. The bond would subsequently be sold by the seller to the buyer for the equivalent price, or the ask yield.

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