A Difference Between the 'Buy' and 'Sell' Rates of Foreign

question 11

Multiple Choice

A difference between the 'buy' and 'sell' rates of foreign currency occurs because of:

• A)timing differences between 'buy' and 'sell' trades.
• B)profit making by the foreign exchange dealer.
• C)arbitrage opportunities available to non-foreign exchange dealers.
• D)none of the given options.

---

Definitions:

Fixed Expenses

Costs that do not change in total with changes in the volume of activity, such as rent, salaries, and insurance premiums.

Variable Expenses

Costs that change in proportion to the level of business activity or production volume.

Fixed Expenses

Fixed expenses are costs that do not change in the short term regardless of the level of production or sales, such as rent, salaries, and insurance premiums.

Margin Of Safety

The excess of budgeted (or actual) dollar sales over the break-even dollar sales.