Market Makers
Three NASDAQ market makers display the following quotes for XYZ stock: Market Maker A: 45.10/45.25, Market Maker B: 45.15/45.30, Market Maker C: 45.12/45.22. What is the inside market?
Inside market = HIGHEST bid + LOWEST ask. Best prices for buyers and sellers.
Complete Analysis & Legal Rationale
The inside market represents the best bid (highest) and best ask (lowest) from all market makers. The highest bid is $45.15 (Market Maker B), and the lowest ask is $45.22 (Market Maker C). Therefore, the inside market is $45.15/$45.22.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
This combines the lowest bid and highest ask, which is incorrect.
The best ask is $45.22, not $45.25.
Matches the verified teaching point in the explanation.
$45.10 is not the highest bid; $45.15 is.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.