In general,the foreign exchange dealer's bid-offer spread _______ with increased volatility of FX.
A) is not concerned
B) decreases
C) widens
D) narrows

Question

Quizplus · Accepted Answer

The bid-offer spread widens with increased volatility of FX. This is because increased volatility creates uncertainty in the market, making it riskier for dealers to take positions. As a result, they widen the spread as a way to protect themselves from potential losses.

In General,the Foreign Exchange Dealer's Bid-Offer Spread _______ with Increased