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- Subject
- Foreign Exchangeeconomics-mcqs › foreign-exchange
- Published
- 1 Jun 2019
- Last updated
- 28 May 2026
What term describes the gap between the buying price (bid) and the selling price (ask)?
Multiple choice question for Foreign Exchange. Select an option, then review the explanation below.
Explanation
The difference between the bid price and the ask price in a market is known as the spread. It represents the cost or difference between buying and selling prices. Profit is the financial gain, arbitrage refers to exploiting price differences, and a forward contract is an agreement to buy or sell at a future date.
More Foreign Exchange MCQs
Practice related questions from the same subject.
- 1.In a floating exchange rate system, what is the typical trend observed regarding currency values?
- 2.What term describes the increase in the value of one currency compared to another?
- 3.What is the typical impact of a fiscal expansion in the UK on the value of the pound sterling?
- 4.What do we call exchange rates that fluctuate based solely on market supply and demand without government intervention?
- 5.What type of exchange rate system was established by the agreements made at the 1944 Bretton Woods conference?