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

Question

Quizplus · Accepted Answer

The spread refers to the difference between the offer rate and the bid rate in the interbank market for foreign exchange. Cross rates are exchange rates between two currencies that do not involve the U.S. dollar, options are financial instruments that give the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price within a set timeframe, and arbitrage refers to the practice of buying and selling assets simultaneously in different markets to take advantage of price discrepancies.

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