As a follow up to yesterday’s question, here is your question PLUS answer and rationale:
Question (Relevant to Series 24, Series 55, Series 62, Series 7)
To calculate a markdown as a percentage, which of the following are used?
Answers
A: The lowest bid
B: The highest bid
C: The highest offer
D: The lowest offer
Correct Answer: B
Rationale: A markdown is calculated when a customer sells shares. The customer would sell their shares to the market maker who is willing to buy at the highest bid. The markdown is calculated by dividing the amount kept by the market maker by the highest bid.