土豆妮

Which of the following statements about foreign currency bid-ask spreads is least accurate? Foreign currency bid-ask spreads:

A) decrease as the size of the transaction decreases.

B) are not directly affected by bank and currency dealer positions.

C) are a function of transaction volume and volatility.

土豆妮

Which of the following statements about foreign currency bid-ask spreads is least accurate? Foreign currency bid-ask spreads:

A) decrease as the size of the transaction decreases.

B) are not directly affected by bank and currency dealer positions.

C) are a function of transaction volume and volatility.

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Bid-ask spreads are size related in that the smaller the transaction the larger the spread.

土豆妮

The percentage spread between foreign currency quotations is equal to the:

A) ask price minus the bid price divided by the bid price multiplied by 100.

B) ask price minus the bid price divided by the ask price multiplied by 100.

C) ask price divided by the bid price.

土豆妮

The percentage spread between foreign currency quotations is equal to the:

A) ask price minus the bid price divided by the bid price multiplied by 100.

B) ask price minus the bid price divided by the ask price multiplied by 100.

C) ask price divided by the bid price.

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% spread = [(ask price – bid price) / ask price] × 100

土豆妮

Given a foreign currency quotation bid of $0.8955 and an ask of $0.9045 what is the percentage bid-ask spread, and who profits from it?

% Bid-Ask Spread

Profits?

A) 0.9950% Customer

B) 0.9950% Bank

C) 1.0050% Bank

土豆妮

Given a foreign currency quotation bid of $0.8955 and an ask of $0.9045 what is the percentage bid-ask spread, and who profits from it?

% Bid-Ask Spread

Profits?

A) 0.9950% Customer

B) 0.9950% Bank

C) 1.0050% Bank

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% spread = [(ask price bid ? price) / ask price] × 100

= [(0.9045 ? 0.8955) / 0.9045 ] × 100 = 0.9950%

The bid-ask spread is how banks make their profit on foreign currency transactions.

luqian55

thanks

annyyu

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