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Which of the following characteristics accurately describes the stock market?

A fixed-income market where participants buy and sell debt securities

An active market that determines the price of a firms shares

The bid-ask spread in a dealer market represents the profit that a dealer would make on a transaction involving a security. Which of the following statements best describes the bid-ask spread?

The difference between the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it.

The sum of the price at which a dealer is willing to buy a security and the price at which a dealer is willing to sell it.

The difference between the closing price of the security and the opening price of the security on the day of the transaction.

Fernando, a trader, wants to buy 1,000 shares of XYZ stock, while a second trader, Ally, is willing to sell 1,500 shares of the same stock. Unfortunately, Fernando and Ally dont know one another and must complete their transactions using the stock exchanges market-making dealer. XYZs market maker is willing to sell her shares for $26.80 per share and purchase additional shares for $26.25 per share. Select the most appropriate values in the following table:

Term	Value
Bid price
Ask price
Bid-ask spread

If the market maker is willing to purchase the entire block of 1,500 shares from Ally and, from that block, resell 1,000 shares to Fernando, then the market makers net profit from Fernandos transactionexcluding any inventory effectswill be ( ) .

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