Given the following bid and ask prices quoted by a dealer: Bid price of $1.1250/€ and Ask price of $1.1255/€, which of the following statements best describes the Bid-Ask Spread as a percentage? The dealer expects to make a profit of $0.005/€ on each transaction. The Bid-Ask Spread is 0.0044% of the bid price. The Bid-Ask Spread is 0.005% of the transaction value. The Bid-Ask Spread represents the dealer's margin on top of the selling price.
Given the following bid and ask prices quoted by a dealer: Bid price of $1.1250/€ and Ask price of $1.1255/€, which of the following statements best describes the Bid-Ask Spread as a percentage? The dealer expects to make a profit of $0.005/€ on each transaction. The Bid-Ask Spread is 0.0044% of the bid price. The Bid-Ask Spread is 0.005% of the transaction value. The Bid-Ask Spread represents the dealer's margin on top of the selling price.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Given the following bid and ask prices quoted by a dealer: Bid price of $1.1250/€ and Ask price of $1.1255/€, which of the following statements best describes the Bid-Ask Spread as a percentage?
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The dealer expects to make a profit of $0.005/€ on each transaction.
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The Bid-Ask Spread is 0.0044% of the bid price.
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The Bid-Ask Spread is 0.005% of the transaction value.
-
The Bid-Ask Spread represents the dealer's margin on top of the selling price.
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