Bid-Ask Spread: Banco Herrero Wants to Make a Bid-Ask Spread

question 46

Multiple Choice

Bid-ask spread: Banco Herrero wants to make a bid-ask spread of 0.55 per cent on its foreign exchange transactions. If the ask rate on the Mexican peso (MP) is MP10.4192/$, what does the bid rate have to be?

• A) MP10.3619/$
• B) MP10.4192/$
• C) MP10.4249/$
• D) MP10.2165/$

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Definitions:

Labor for Leisure

The trade-off between working hours for income and spending time on relaxation or enjoyment activities.

Hourly Wage Rate

The hourly wage rate is the amount of money paid to an employee for one hour of work, often used to calculate overall earnings in jobs that compensate workers on an hourly basis.

Extra Hour

An additional period of time, typically beyond what is normal or expected, often referring to work or activities.

Price of Leisure

The opportunity cost of leisure, represented by the wages foregone by choosing leisure time over work time.