You do all your research – share XYZ is the perfect share for you to buy right now! You check its liquidity, only to find it has an average buy/sell spread of 8%. OK, next!
You pay the spread twice: once when buying, and again when selling. Let’s assume you’re holding this stock between 3 months and 3 years.
What is the maximum average buy/sell spread you’re prepared to pay?
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