In the Interbank Market for Foreign Exchange,the ____ Refers to the Difference

question 34

Multiple Choice

In the interbank market for foreign exchange,the ____ refers to the difference between the offer rate and the bid rate.

• A) Cross rate
• B) Option
• C) Arbitrage
• D) Spread

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Definitions:

Interest Rate

The fraction of a loan amount that is applied as interest for the borrower, commonly indicated as an annual percentage of the remaining loan balance.

Compounded Annually

Interest calculation method where interest is added to the principal at the end of each year, and future interest calculations include this additional amount.

Interest

The cost of borrowing money or the return on investment for lenders, typically expressed as a percentage.

Rate of Return

The gain or loss on an investment over a specific period, expressed as a percentage of the investment's initial cost.