For the Aussie/euro spot rate (AUD/EUR 1.8088-1.8098),the percentage spread is:
A) 1
B) 5.5
C) 10
D) none of the given answers.

Question

Quizplus · Accepted Answer

To calculate the percentage spread, we need to find the difference between the bid and ask prices and then divide it by the midpoint.

Midpoint = (1.8088+1.8098)/2 = 1.8093

Spread = 1.8098 - 1.8088= 0.0010

Percentage Spread = (Spread/ Midpoint) x 100 = (0.0010/1.8093) x 100 = 0.0550 or 5.5%

Therefore, the correct answer is B: 5.5.

For the Aussie/euro Spot Rate (AUD/EUR 1