SIE (Securities Industry Essentials) Practice Exam

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In the over-the-counter market, the term 'spread' refers to the difference between the:

bid and asked prices
opening and closing prices
highest and lowest prices
settlement and delivery prices

The correct answer is: bid and asked prices

The spread in the over-the-counter market refers to the difference between the bid and asked prices, also known as the buy and sell prices for a security. This represents the cost of executing a trade and is determined by the supply and demand for the security. Option B is incorrect because the opening and closing prices are only relevant for exchange-traded securities. Option C is incorrect because the highest and lowest prices do not necessarily represent the buy and sell prices for a security. Option D is incorrect because settlement and delivery prices are only relevant for the physical delivery of commodities, not for securities traded in the over-the-counter market.