Foreign exchange ________ earn a profit by a bid-ask spread on currencies they purchase and sell. Foreign exchange ________, on the other hand, earn a profit by bringing together buyers and sellers of foreign currencies and earning a commission on each sale and purchase.
A) central banks; treasuries
B) dealers; brokers
C) brokers; dealers
D) speculators; arbitrageurs

Question

Quizplus · Accepted Answer

Dealers are the ones who buy and sell currencies, earning a profit through the bid-ask spread, while brokers earn a commission by bringing together buyers and sellers of foreign currencies. Therefore, option B, which suggests that dealers earn through bid-ask spread and brokers earn through commission, is the correct choice. The other options are not relevant to the given scenario.

Foreign Exchange ________ Earn a Profit by a Bid-Ask Spread