The inherent challenge with the Series 65/66 exam is that it covers so many topics but only for a few questions at most. You wouldn't expect the next question to show up on everybody's exam, but you would expect something like this to show up here on there. So, let's be ready for the following possible exam question:
The inside market is:
A. highest bid, lowest ask from the market maker quoting the largest position
B. highest bid, highest ask from all market makers
C. highest bid, lowest ask from all market makers
D. lowest bid, highest ask from all market makers
EXPLANATION: when a customer places a market order to buy or sell stock, he is willing to pay the best available price ASAP to get the stock or sell it. The best prices for the customer would be the highest bid--if he's selling and the lowest ask/offer price--if he's buying.
ANSWER: C
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