A difference between the 'buy' and 'sell' rates of foreign currency occurs because of:

Question

Quizplus · Accepted Answer

The difference between the ‘buy’ and ‘sell’ rates of foreign currency is known as the ‘spread’, and it represents the profit margin made by the foreign exchange dealer. The dealer purchases foreign currency at a lower rate and then sells it at a higher rate to earn a profit. The spread can vary depending on a variety of factors, including the currency pair being traded, market conditions, and the dealer's pricing strategy. Timing differences between trades and arbitrage opportunities available to non-foreign exchange dealers may also affect the spread, but they are not the primary drivers of the difference between buy and sell rates.

A Difference Between the 'Buy' and 'Sell' Rates of Foreign