CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

Currently the market in a stock is "$30.12 bid, offered at $30.62." A new sell limit order is placed at $30.50. This limit order is said to ______

A. take the market.
B. make the market.
C. make a new market.
Correct Answer: C

The new limit order becomes a standing limit order and thus makes a new market. The market for the stock is now "$30.12 bid, offered at $30.50." The spread is narrower than before.

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