If Citibank quoted bid and offer rates for the Swiss franc at $.4850/$.4854,the bank would be prepared to buy,say,1 million francs for $485,000 and sell them for $485,400.

Question

Quizplus · Accepted Answer

This is correct. The bid rate of $.4850 means that Citibank is willing to buy 1 Swiss franc for $.4850, and the offer rate of $.4854 means that they are willing to sell 1 Swiss franc for $.4854. Therefore, if they bought 1 million francs, it would cost them $485,000 (1,000,000 x $.4850), and if they sold 1 million francs, they would receive $485,400 (1,000,000 x $.4854).

If Citibank Quoted Bid and Offer Rates for the Swiss