Assume that the current buy rate for the Japanese yen is 87.4100 yen per dollar and the current sell rate is 87.4400 yen per dollar.Assume that a bank buys and sells $1,000,000 in the yen market.How much would the bank collect as a spread in terms of yen?

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Quizplus · Accepted Answer

The spread is the difference between the sell rate and the buy rate. Here, the bank buys at 87.4100 yen per dollar and sells at 87.4400 yen per dollar. For $1,000,000, the spread in terms of yen is (87.4400 - 87.4100) * 1,000,000 = 30,000 yen.

Assume That the Current Buy Rate for the Japanese Yen