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What does the spread between the bid and asked bond prices represent? What does the spread...

What does the spread between the bid and asked bond prices represent?

What does the spread between the bid and asked bond prices represent?

Multiple Choice

  • Difference between the coupon rate and the current yield

  • Difference between the current yield and the yield to maturity

  • Accrued interest

  • Dealer's profit

  • Bondholder's profit

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Answer #1

The spread between the bid and asked bond prices represent dealers profit

So the correct answer is option of dealer's profit

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