The Size of the Spread That a Dealer Will Quote

question 25

Multiple Choice

The size of the spread that a dealer will quote for a foreign exchange transaction will vary depending on

• A)the degree of market volatility at the time.
• B)the degree of risk associated with a particular currency.
• C)the size of the market for the currency being traded.
• D)All of above.

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Definitions:

Net Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of a company.

Marginal Tax Rates

The rate at which the next dollar of taxable income is taxed.

Eligible Dividends

Designated dividends that are entitled to a reduced tax rate in certain jurisdictions, generally paid out of the earnings of a corporation already taxed at the corporate level.

Operating Cash Flow

Cash generated from a company's regular business operations, indicating its ability to generate sufficient revenues.