Question of the Week

If a foreign currency dealer is quoting a bid-ask spread of $1.0500-35 on the euro, what must be the dealer's percentage spread?

A) -0.3333%
B) 1 .003%
C) 0.3333%
D) 0.3322%

Answer:

The correct answer is: D)

Percentage Spread = [(Ask Price - Bid Price)/Ask Price] x 100

= [(1.0535 - 1.0500)/1.0535] x 100
= 0.3322%