You are an active currency trader in the dollar versus euro market. The current market quote ($/€) is 1.51-1.55. However, you believe the dollar will appreciate versus the euro. Which of the following quotes is the most likely one you will present to the market given your views?
A) 1.52-1.56
B) 1.50-1.54
C) 1.50-1.57
D) 1.52-1.54

Question

Quizplus · Accepted Answer

If you believe that the dollar will appreciate against the euro, you will quote a lower bid price and a lower ask price. This is because you are willing to buy the euro at a lower price and sell it at a higher price when the dollar appreciates in value. Option B has a lower bid-ask spread than option A or C, and a higher bid than option D, making it the best choice.

You Are an Active Currency Trader in the Dollar Versus