CFA Practice Question
Currently the market in a stock is "$30.12 bid, offered at $30.62." A new buy limit order is placed at $30.25. This limit order is said to ______
A. take the market.
B. make the market.
C. make a new market.
Explanation: The new limit order becomes a standing limit order and thus makes a new market. The market for the stock is now "$30.25 bid, offered at $30.62." The spread is narrower than before.
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