The ____ is defined as the difference between the offer price and the bid price in a foreign exchange.
A) cost to serve
B) spread
C) forward discount
D) forward premium

Question

The ____ is defined as the difference between the offer price and the bid price in a foreign exchange.
A) cost to serve 
B) spread 
C) forward discount 
D) forward premium

Quizplus · Accepted Answer

The spread is the difference between the bid price (the price at which a market maker is willing to buy a currency) and the ask price (the price at which a market maker is willing to sell a currency). It represents the market maker's profit and can vary depending on market conditions and the currency pair being traded. Options A, C, and D are unrelated to the concept of spread in foreign exchange.

The ____ Is Defined as the Difference Between the Offer