Question

Reese buys securities in a pharmaceutical company for $3,300. After 8 months, when the prices of the securities go up in the market, she sells her securities for $3,700. In this case, the difference of $400 in the prices of the securities is called:_____.a. a price over-ride.

b. price dispersion.
c. thrift.
d. the spread.

Answer 1

The difference of $400 in the prices of the securities is called Option D: the spread.

Step-by-step explanation:

Reese buys securities and after 8 months when the prices go up, she sells the securities in a higher amount. There is difference of $400 in these prices. This difference is called the spread.

Spread is basically difference in the price of the same good at different dates. The securities Reese bought are sold 8 months later. So, it is the spread, Option D.

In case of price override, the price of the commodity is changed after application of discount. Price dispersion is the difference of price different sellers are giving at the same time. Thrift refers to spending money carefully. Thus, all the others options a, b and c are incorrect.