Question 11
Liquidity affects how cheaply you can buy or sell an asset. The bid-ask spread -- the difference between the highest price a buyer will pay (bid) and the lowest price a seller will accept (ask) -- is a direct measure of that cost. A narrow spread typically indicates good liquidity and low transaction cost; a wide spread implies higher implicit cost, especially for small or thinly traded ETFs or stocks. Market makers and order book depth influence spreads. For everyday investors, larger spreads mean you effectively pay more when entering and exiting positions. This question asks what the bid-ask spread represents.
What does the bid-ask spread measure?
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By Wise Wallet
The Rule of 72 gives a quick estimate of how many years it takes to double money: divide 72 by the annual interest rate.