Bid-ask spread: A local bank has requested foreign exchange quotes for the Swedish krona from Citibank. Citibank quotes a bid rate of $0.1652/SK and an ask rate of $0.1667/SK. What is the bid-ask spread?

Question

Quizplus · Accepted Answer

The bid-ask spread is calculated as (Ask - Bid) / Ask. Here, it is ($0.1667 - $0.1652) / $0.1667 = 0.0009 / 0.1667 = 0.0054, or 0.54%, which is closest to 0.9% when considering the options provided.

Bid-Ask Spread: a Local Bank Has Requested Foreign Exchange Quotes