A Bid Is the Price in One Currency at Which

question 61

Essay

A bid is the price in one currency at which a dealer will buy another currency. An ask is the price at which a dealer will sell the other currency. Dealers bid (buy) at one price and ask (sell) at a slightly higher price, making their profit from the spread between the prices. List and explain three reasons/factors that could make the spread small.

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Definitions:

General Motors

A multinational corporation headquartered in the United States that designs, manufactures, markets, and distributes vehicles and vehicle parts.

Pursuit of Happiness

A fundamental right mentioned in the Declaration of Independence to freely pursue joy and live life in a way that makes one happy, as long as one does not do anything illegal or violate the rights of others.

Humble Background

A term describing an individual's origins in modest circumstances, without privilege or significant resources.