Market Makers
A stock is quoted at $45.50 bid, $45.75 ask. If a customer wants to buy 100 shares, what price will they pay?
Customers BUY at the ASK, SELL at the BID. The spread is the market makers profit.
Complete Analysis & Legal Rationale
When buying, customers pay the ask (offer) price. The ask of $45.75 is the price at which the market maker is willing to sell. The bid of $45.50 is what the market maker would pay to buy from a customer.
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:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
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.