Which of the following is likely to have the narrowest bid-asked spread?
A) A Nasdaq stock
B) A U.S. Treasury bill
C) A corporate bond
D) A Fannie Mae bond

Question

Quizplus · Accepted Answer

U.S. Treasury bills are considered to be the most liquid and safe investment and have a very low default risk. This makes them a highly sought-after investment, resulting in a narrow bid-asked spread. On the other hand, Nasdaq stocks, corporate bonds, and Fannie Mae bonds tend to have a higher level of risk and lower marketability, resulting in wider bid-asked spreads.

Which of the Following Is Likely to Have the Narrowest