Question

You would like to purchase one Class A share of Berkshire Hathaway through your Scottrade brokerage account. Scottrade charges a ​$6 commission for online trades. You log into your​ account, check the​ real-time quotes for Berkshire Hathaway​ (you see a bid price of ​$262 comma 875 and an ask price of ​$263 comma 810​) and submit your order. a. What is the current​ bid/ask spread for Berkshire Hathaway Class A​ shares?

Answer 1

The current​ bid/ask spread for Berkshire Hathaway Class A​ shares is $935

Step-by-step explanation:

The computation of the current bid/ask price is shown below:

The Current bid/ask price = Ask price - Bid price

= $263,810 - $262,875

= $935

The commission amount should be ignored in the computation part. Hence, it will not be considered as it is not relevant.