Spreads in quotations of exchange rates are:
A) the geographical dispersion of nations that use the currency.
B) a measure of contagion involved in changes in exchange rates.
C) the difference in the price the buyer pays versus the price the seller receives.
D) the percentage of interest one pays when borrowing to purchase currencies.

Question

Quizplus · Accepted Answer

Spreads in quotations of exchange rates refer to the difference between the price at which buyers are willing to buy a currency and the price at which sellers are willing to sell it. This difference is also known as the bid-ask spread and represents the transaction cost that buyers and sellers incur to exchange currencies.

Spreads in Quotations of Exchange Rates Are